(As filed October 16, 1998)
File No. 70-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM U-1
APPLICATION OR DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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Interstate Energy Corporation
Alliant Industries, Inc.
222 West Washington Avenue
Madison, Wisconsin 53703
Whiting Petroleum Corporation
1700 Broadway, Suite 2300
Denver, Colorado 80290
(Names of companies filing this statement and
addresses of principal executive offices)
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Interstate Energy Corporation
(Name of top registered holding company parent)
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Erroll B. Davis, Jr.
President and
Chief Executive Officer
Interstate Energy Corporation
222 West Washington Avenue
Madison, Wisconsin 53703-0192
(Name and address of agent for service)
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The Commission is requested to send copies of all
notices, orders and communications in connection with
this Application/Declaration to:
Barbara J. Swan, General Counsel William T. Baker, Jr., Esq.
Steven R. Suleski, Senior Attorney Thelen Reid & Priest LLP
Interstate Energy Corporation 40 West 57th Street
222 West Washington Avenue New York, New York 10019
Madison, Wisconsin 53703-0192
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ITEM 1. DESCRIPTION OF PROPOSED TRANSACTION.
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1.1. Background. Interstate Energy Corporation ("Interstate") is a
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registered holding company under the Public Utility Holding Company Act of 1935,
as amended (the "Act").(1) Its public-utility subsidiaries are Wisconsin Power &
Light Company, South Beloit Water, Gas and Electric Company, Interstate Power
Company, and IES Utilities, Inc. (collectively, the "Operating Companies").
Together, the Operating Companies provide public-utility service to
approximately 895,000 electric and 378,000 retail gas customers in parts of
Wisconsin, Iowa, Minnesota, and Illinois.
Interstate's direct non-utility subsidiaries are Alliant Services
Company, a subsidiary service company, and Alliant Industries, Inc.
("Industries"), which serves as the holding company for Interstate's
energy-related and non-utility investments and subsidiaries. Whiting Petroleum
Corporation ("Whiting"), an indirect, wholly-owned, subsidiary of Industries,
purchases, develops, and produces crude oil and natural gas. Since its
organization in 1980, Whiting has grown primarily through the purchase and
additional development of oil and gas producing properties. Over the past three
years, acquisitions of producing properties by Whiting have totaled nearly $100
million. Whiting currently has an interest in 333 wells in Oklahoma and is
operator of 29 wells. For the year ended December 31, 1997, Whiting had revenues
of $69 million and net income of $12.8 million.
1.2 Summary of Proposed Transaction. Interstate, Industries and Whiting
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request authorization for various transactions, as described below, relating to
the acquisition of Golden Gas Production Company ("Golden Gas"), an Oklahoma
corporation. Golden Gas is an independent oil and gas producer located in Tulsa,
Oklahoma. The assets of Golden Gas consist primarily of interests in 240 gas and
oil wells, most of which are in Oklahoma. Golden Gas operates 120 of these
wells. Gas production accounts for 87% of the revenues of Golden Gas. For the
year ended December 31, 1997, Golden Gas had revenues of $4.4 million and net
income of $662,000. Golden Gas does not own or operate any facilities used for
the distribution at retail of natural or manufactured gas.
Interstate, Whiting, Golden Gas and Alan R. Staab, sole shareholder of
Golden Gas ("Shareholder"), have entered into an Agreement and Plan of
Reorganization, dated September 15, 1998 (the "Agreement"), pursuant to which
Interstate has agreed to acquire from Shareholder all of the issued and
outstanding common stock of Golden Gas ("Golden Gas Stock") through a tax-free
exchange of Interstate's shares of common stock, $01 par value per share
("Interstate Stock") under Section 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended. Once the transaction is completed, Interstate intends to
contribute the Golden Gas Stock to Industries
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(1) See WPL Holdings, Inc., et al., Holding Co. Act Release No.
26856 (April 14, 1998), 66 SEC Docket 2256 (the "Merger Order").
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which, in turn, will contribute such shares to Whiting, which will thereafter
manage the oil and gas assets of Golden Gas.
Interstate requests authorization to issue the Interstate Stock in
such amounts and for the purposes contemplated in the Agreement. In addition, to
the extent that such transactions are not exempt pursuant to Rule 45(b) under
the Act, Interstate and Industries request authorization to contribute the
acquired shares of Golden Gas Stock to Whiting.
1.3 Principal Terms of Agreement.
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Under the Agreement, the parties have agreed that the value of the
Golden Gas Stock is $9,485,500, subject to certain adjustments that are
specified in the Agreement (the "Agreed Value"). Interstate has agreed to
exchange for the Golden Gas Stock a number of shares of Interstate Stock
determined by dividing the Agreed Value by $32. In addition, if, on the date of
closing, the Market Price of the Interstate Stock (defined as the mean average
of the closing prices for the Interstate Stock for the first ten of the last
fifteen trading days immediately prior to the closing date) is less than $32 per
share, then, on the second anniversary of the date of the Agreement, Shareholder
shall be entitled to receive an additional number of shares of Interstate Stock
representing the difference, if any, between $32 per share and the greater of
(i) the average of the trading prices for Interstate Stock for the 90 days
immediately preceding such second anniversary, or (ii) the Market Price;
provided that in no event shall such difference exceed $4 per share. If the
average of the closing prices for the Interstate Stock, as determined pursuant
to (i), above, shall exceed $32, Shareholder shall not be entitled to any
additional shares of Interstate Stock.
Interstate has reserved 246,875 unissued shares of Interstate Stock
to be exchanged at closing for the Golden Gas Stock, representing, on a pro
forma basis, about .32% of the issued and outstanding shares of Interstate Stock
as of July 31, 1998, and an additional 35,268 shares of Interstate Stock,
representing the maximum number of shares of Interstate Stock required to be
delivered to Shareholder on the second anniversary date of the Agreement in
accordance with the computation described above. The shares of Interstate Stock
issued in this transaction will be "restricted securities" within the meaning of
the Federal securities laws and may be resold by Shareholder without
registration under the Securities Act of 1933, as amended, only in accordance
with Securities Act Rule 144.
The Agreement contains representations and warranties, indemnities, and
conditions to closing that are usual and customary for a transaction of this
type. The Agreement may be terminated by either party if Interstate has not
obtained Commission approval under the Act for the transaction on or before
December 31, 1998.
The Agreement is filed herewith as Exhibit B.
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ITEM 2. FEES, COMMISSIONS AND EXPENSES.
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The fees, commissions and expenses incurred or to be incurred in
connection with the transactions proposed herein are estimated at $5,000.
ITEM 3. APPLICABLE STATUTORY PROVISIONS.
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3.1 Sections 9(a) and 10 of the Act are applicable to Interstate's
acquisition of the Golden Gas Stock. Sections 6(a) and 7 are applicable to
Interstate's issuance of the Interstate Stock. Section 12(b) of the Act is
applicable to Interstate's contribution of the Golden Gas Stock to Industries
and to the contribution of such shares by Industries to Whiting, but may be
deemed to be exempt therefrom pursuant to Rule 45(b). The transactions are also
subject to Section 32(h)(4) and Rule 54 thereunder.
The transactions proposed herein involve an acquisition of securities,
as well as an acquisition of an interest in an other (i.e., non-utility)
business, and are therefore subject to the approval of this Commission under
Section 10. The relevant standards for approval under Section 10 are set forth
in subsections (b), (c) and (f). As applied to interests in non-utility
businesses, Section 10(c)(1) of the Act provides that the Commission shall not
approve an acquisition that is "detrimental to the carrying out of the
provisions of section 11." Section 11(b)(1), in turn, directs the Commission to
limit the operations of a holding company system to a single integrated
public-utility system and such non-utility businesses as are "reasonably
incidental, or economically necessary or appropriate to the operations" of its
integrated system or systems. In this case, the requirements of Section 10(c)
are met and there is no basis for the Commission to make any negative findings
under Section 10(b).
As indicated, the assets and operations of Golden Gas are quite similar
to those of Whiting and will be incorporated into Whiting's existing business.
Whiting currently has an interest in 333 gas and oil wells in Oklahoma, and the
acquisition of Golden Gas will provide Whiting with an interest in an additional
240 wells. The acquisition will approximately double Whiting's Oklahoma oil and
gas reserves. The Commission has already determined, as a part of the merger
proceeding by which Interstate became a registered holding company, that
Whiting's operations are retainable by Interstate under the standards of Section
11(b)(1), citing instances in which the Commission has previously authorized
other registered holding companies to engage in oil and gas production and
similar non-utility activities.(2) Accordingly, there is ample precedent under
Sections 10 and 11(b) of the Act for Interstate's proposal to acquire Golden
Gas.
3.2 Rule 54 Analysis. The transactions proposed herein are also subject
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to Section 32(h)(4) of the Act and Rule 54 thereunder. Rule 54 provides that, in
determining whether to
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(2) Merger Order, 66 SEC Docket at 2270, and Appendix A, n. 12.
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approve any transaction that does not relate to an "exempt wholesale generator"
("EWG") or "foreign utility company" ("FUCO"), as defined in Sections 32 and 33,
respectively, the Commission shall not consider the effect of the capitalization
or earnings of any subsidiary which is an EWG or FUCO upon the registered
holding company system if paragraphs (a), (b) and (c) of Rule 53 are satisfied.
Interstate is in compliance with all requirements of Rule 53(a).
Interstate's "aggregate investment" (as defined in Rule 53(a)(1)(i)) in all EWGs
and FUCOs is currently $68 million, or about 11.5% of Interstate's "consolidated
retained earnings" (as defined in Rule 53(a)(1)(ii)) for the four quarters ended
June 30, 1998 ($591 million). In addition, Interstate has complied and will
comply with the record-keeping requirements of Rule 53(a)(2), the limitation
under Rule 53(a)(3) on the use of the Operating Companies' personnel to render
services to EWGs and FUCOs, and the requirements of Rule 53(a)(4) concerning the
submission of copies of certain filings under the Act to retail regulatory
commissions. Finally, none of the circumstances described in Rule 53(b) has
occurred or is continuing.
ITEM 4. REGULATORY APPROVALS.
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No state commission, and no federal commission, other than this
Commission, has jurisdiction over the proposed transactions insofar as they
concern any of the Applicants.
ITEM 5. PROCEDURE.
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The Commission is requested to publish a notice under Rule 23 with
respect to the filing of this Application or Declaration as soon as practicable.
The Applicants request that the Commission's Order be issued not later than
December 22, 1998 in order to accommodate a closing on the proposed transaction
before December 31, 1998 and that there should not be a 30-day waiting period
between issuance of the Commission's order and the date on which the order is to
become effective. The Applicants hereby waive a recommended decision by a
hearing officer or any other responsible officer of the Commission and consents
that the Division of Investment Management may assist in the preparation of the
Commission's decision and/or order, unless the Division opposes the matters
proposed herein.
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS.
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A. - EXHIBITS.
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A Restated Articles of Incorporation of Interstate, as
amended April 21, 1998 (incorporated by reference to
Exhibit 3.2 to Interstate's Current Report on Form
8-K) (File No. 1-9894).
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B Agreement and Plan of Reorganization dated as of
September 15, 1998 by and among Interstate, Whiting,
Golden Gas and Alan R. Staab.
C None.
D None.
E None.
F Opinion of Counsel. (To be filed by amendment).
G-1 Financial Data Schedule Per Book - Interstate. (To
be filed by amendment).
G-2 Financial Data Schedule Pro Forma Interstate. (To be
filed by amendment).
H Proposed Form of Notice of Proposed Transactions.
B. FINANCIAL STATEMENTS.
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1.1 Balance Sheet of Interstate and consolidated
subsidiaries, as of June 30, 1998 (incorporated by
reference to the Quarterly Report on Form 10-Q of
Interstate) (File No. 1-9894).
1.2 Statement of Income of Interstate and consolidated
subsidiaries, as of June 30, 1998 (incorporated by
reference to the Quarterly Report on Form 10-Q of
Interstate) (File No. 1-9894).
1.3 Balance Sheet of Golden Gas or the years ended
December 31, 1996 and December 31, 1997. (See Exhibit
E to Agreement and Plan of Reorganization - Exhibit B
hereto).
1.4 Statement of Income and Cash Flows of Golden Gas for
the years ended December 31, 1996 and December 31,
1997. (See Exhibit E to Agreement and Plan of
Reorganization - Exhibit B hereto).
1.5 Pro Forma Capitalization of Interstate and
consolidated subsidiaries after giving effect to the
transactions contemplated herein. (To be filed by
amendment).
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1.6 Pro Forma Income Statement of Interstate and
consolidated subsidiaries after giving effect to the
transactions contemplated herein. (To be filed by
amendment).
ITEM 7. INFORMATION AS TO ENVIRONMENTAL EFFECTS.
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None of the matters that are the subject of this Application or
Declaration involve a "major federal action" nor do they "significantly affect
the quality of the human environment" as those terms are used in section
102(2)(C) of the National Environmental Policy Act. The transaction that is the
subject of this Application or Declaration will not result in changes in the
operation of the Applicants that will have an impact on the environment. The
Applicants are not aware of any federal agency that has prepared or is preparing
an environmental impact statement with respect to the transactions that are the
subject of this Application or Declaration.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, as amended, the undersigned companies have duly caused this Application
or Declaration filed herein to be signed on their behalf by the undersigned
thereunto duly authorized.
INTERSTATE ENERGY CORPORATION
By: /s/Erroll B. Davis, Jr.
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Name: Erroll B. Davis, Jr.
Title: President and Chief Executive Officer
ALLIANT INDUSTRIES, INC.
By: /s/James E. Hoffman
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Name: James E. Hoffman
Title: President
WHITING PETROLEUM CORPORATION
By: /s/John R. Hazlett
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Name: John R. Hazlett
Title: Vice President
Date: October 16, 1998
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EXHIBIT INDEX
Exhibit Description
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B Agreement and Plan of Reorganization dated as of
September 15, 1998 by and among Interstate, Whiting,
Golden Gas and Alan R. Staab.
H Proposed Form of Notice of Proposed Transactions.
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made as
of September 15, 1998, by and among Interstate Energy Corporation, doing
business as Alliant Corporation, a Delaware corporation ("Alliant"); Whiting
Petroleum Corporation, a Delaware corporation ("Whiting"); Golden Gas Production
Company, an Oklahoma corporation ("Golden"); and Alan R. Staab, sole shareholder
of Golden ("Shareholder").
WITNESSETH:
WHEREAS, Golden desires to redeem certain of its shares owned by
Shareholder, in consideration of the assignment to Shareholder of certain assets
of Golden unrelated to the oil and gas business, and Shareholder desires to
offer to Golden for redemption such shares (the "Redeemed Shares");
WHEREAS, subsequent to redemption of the Redeemed Shares, it is the
desire of Alliant to acquire Golden through a tax-free exchange of stock of the
two companies;
WHEREAS, it is the desire of Shareholder and Golden that Alliant
acquire Golden through such tax-free exchange;
WHEREAS, Alliant wishes to have Whiting, its wholly-owned indirect
subsidiary, be a party to this Agreement to administer certain of the provisions
thereof; and
WHEREAS, in order to carry out the foregoing objectives, Alliant,
Whiting, Shareholder and Golden desire to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
hereinafter set forth, the parties agree as follows:
ARTICLE I.
REDEMPTION
1.1 Redemption Agreement. Prior to Closing , Shareholder shall
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transfer, assign and convey the Redeemed Shares to Golden and Golden shall
purchase and redeem the Redeemed Shares from Shareholder. The stock certificates
representing the Redeemed Shares shall be delivered by Shareholder to Golden
prior to Closing duly endorsed for transfer.
1.2 Consideration for Redemption. The consideration to be given
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by Golden to Shareholder for the Redeemed Shares shall be 100% of Golden's
partnership interest in Kensington Tower Partners, Limited Partnership (the
"Kensington Interest"). The Kensington Interest shall be conveyed to Shareholder
free of all liens, charges and encumbrances by Golden's execution and delivery
of an instrument substantially in the form of the assignment attached to the
form of Stock Redemption Agreement attached hereto to as Exhibit B (the
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"Kensington Agreement"); provided, however, that in such Kensington Agreement,
Shareholder shall agree to assume and to indemnify and hold Golden harmless from
and against all obligations and liabilities of Golden (i) as guarantor for the
debt of Kensington Tower Partners, Limited Partnership, or (ii) otherwise
related to the Kensington Interest and shall agree to use his best efforts to
cause Golden to be removed as guarantor for the debt of Kensington Tower
Partners, Limited Partnership.
1.3 Golden Oil and Gas Properties. The redemption of the
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Redeemed Shares shall involve only the Kensington Interest. All oil and gas
properties of Golden (the "Oil and Gas Properties") and all other assets and
properties shall remain in Golden, subject to Section 6.2 hereof. Attached
hereto as Exhibit A is a list of the Oil and Gas Properties, Golden's working
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interest and net revenue interest therein and lists of materials inventory and
undeveloped acreage inventory, and the value ("Value") assigned to each such
interest by the parties. The effective date (the "Effective Date") for the
determination of the Value is June 30, 1998.
ARTICLE II.
TERMS OF THE EXCHANGE
2.1 The Exchange. It is the intention of the parties that the
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exchange of Alliant common stock for Golden common stock (the "Exchange")
described in Section 2.2 below shall be a qualified tax-free exchange in
reorganization under Section 368 (a)(1)(B) of the Internal Revenue Code of 1986,
as amended. The parties agree to take all necessary action to ensure that, to
the extent it is within their control, the requirements for such treatment are
satisfied.
2.2 Consideration.
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2.2.1 Alliant will reserve sufficient shares of its
authorized but unissued shares of its common stock, par value $.01, for
the purpose of the transactions contemplated by this Agreement.
2.2.2 Shareholder, as the sole shareholder of Golden, shall
receive the number of shares of Alliant common stock the "Alliant
Common Stock" for all of then issued and outstanding the shares of
common stock owned by the Shareholder in Golden at the Closing (the
"Golden Common Stock"), determined as follows:
First, the aggregate total value of the Golden Common Stock
held by the Shareholder shall be Nine Million
Four Hundred Eighty-Five Thousand and no/100 Dollars
($9,485,000), adjusted as follows:
(i) Plus or minus, Golden's share of any gas imbalances
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as listed on the Shareholder Disclosure Schedule, attached
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hereto as Exhibit C, subject to verification of amounts by
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Whiting as of the Effective Date, at $0.25/Mcf for all gas
imbalances respecting all of the Oil and Gas Properties
located in the Crawford Field, Roger Mills County, Oklahoma,
and at $1.00 per Mcf for other Oil and Gas Properties;
(ii) Plus, Golden's share of oil in storage tanks above
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the pipeline connection as of the Effective Date;
(iii) Plus or minus, the aggregate amount of adjustments
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in Value of the Oil and Gas Properties for Title Defects or
Environmental Defects pursuant to Article V below;
(iv) Minus, the amount of employee severance
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payments as shown on Exhibit G after taking into account the
income tax benefit to Alliant of Golden making these
disbursements;
(v) Plus, Net Working Capital of Golden calculated
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pursuant to Section 2.7;
(vi) Minus, the aggregate amount of any long term debt
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at the Effective Date; and
(vii) Plus or Minus any other amounts agreed to
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by the parties.
Such aggregate total value, adjusted as above provided, shall be
hereinafter referred to as the "Golden Value" or "GV."
Then, the number of shares of Alliant Common Stock to be received by
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Shareholder shall be determined as follows:
Number of shares of Alliant Common Stock = (GV)
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$32
The number of shares of Alliant Common Stock to be received by
Shareholder shall be rounded to the nearest whole share and no fractional shares
shall be issued.
2.2.3 The parties also shall determine the Market Price for
Alliant common stock (the "Market Price"), which shall be the mean
average of the closing prices for the Alliant common stock for the
first ten (10) of the last fifteen (15) trading days immediately prior
to the Closing Date. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system for the New York Stock Exchange. In the event the
Market Price is below $28 per share, either Alliant or Shareholder may
terminate this Agreement prior to Closing without further liability by
any of the parties hereto.
2.2.4 If the transaction closes and the Market Price
determined pursuant to Section 2.2.3 above was less than $32 per share,
then on the second anniversary date of the date of this Agreement,
Shareholder shall receive an additional number of shares of Alliant
common stock representing the difference, if any, between $32 per share
and the greater of (i) the average of the closing prices for Alliant
common stock for the ninety (90) trading days immediately prior to such
second anniversary date, determined in the manner as set forth in
Section 2.2.3, or (ii) the Market Price; provided, however, that in no
event shall such difference exceed $4 per share and, if the average of
the closing price for Alliant common stock determined pursuant to (i)
above exceeds $32, Shareholder shall not receive any additional shares
of such common stock.
2.2.5 Shareholder shall further receive, the equivalent
in Alliant common stock, of any dividend or other payment or
distribution, of whatever nature, to which an owner of the common stock
of Alliant would have been entitled between the Effective Date and the
Closing Date for each share of Alliant Common Stock to be received by
Shareholder.
2.3 Closing Date. The closing of the transaction contemplated
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herein (the "Closing") shall take place at the offices of Whiting at 10:00 a.m.
(local time) on the later of (i) October 16, 1998, or (ii) five (5) business
days after the parties receive notice that the PUHCA Application referred to in
Section 6.7 hereof has been approved or at such other time as may be agreed by
the parties (the "Closing Date").
2.4 Exchange Procedure. At the Closing, Shareholder shall
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deliver to Alliant the Certificate or Certificates evidencing all of the issued
and outstanding shares of Golden Common Stock. Upon surrender of such
Certificates and other required documents, Shareholder shall be entitled to
receive, in exchange therefor, certificates for shares of the Alliant Common
Stock as provided in Section 2.2.2 above, less the shares of Alliant Common
Stock deposited in the Claims Escrow as specified in Section 2.6.
2.5 Escrow of Alliant Common Stock. At Closing, Shareholder,
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Whiting, and the Deposit Holder shall execute an escrow agreement substantially
in the form attached hereto as Exhibit D (the "Escrow Agreement"), and Alliant
will deposit with the Deposit Holder (defined in the Escrow Agreement as the
"Escrow Agent"), the lesser of (i) shares of Alliant Common Stock having a value
equal to twenty-five percent of the Alliant Common Stock, or (ii) shares of
Alliant Common Stock having a value equal to $2,000,000 as calculated by using
the Alliant closing stock price on the day immediately preceding Closing (the
"Claims Escrow"), to be administered and distributed pursuant to the terms of
the Escrow Agreement. Shares of Alliant Common Stock in such Claims Escrow (the
"Escrow Shares") (i) in the amount of any reductions in the Golden Value
pursuant to Section 2.7 and Article V of this Agreement or (ii) in satisfaction
of any Claims resolved in favor of Alliant, Whiting or Golden Gas pursuant to
Article XIII of this Agreement, shall be released by the Escrow Agent to
Whiting. The Escrow will terminate eighteen (18) months from the date of this
Agreement, and all Escrow Shares, together with any dividends or other payments
or distributions applicable thereto, remaining in the Claims Escrow shall be
released to Shareholder.
2.6 Restricted Securities.
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2.6.1. Shareholder understands that the shares of Alliant
Common Stock to be delivered to Shareholder and the Deposit Holder
pursuant to Sections 2.2.2 and 2.2.3 (if any), and 2.5, respectively,
are characterized as "restricted securities" under the Federal
securities laws inasmuch as they are being acquired in a transaction
not involving a public offering and that under such laws and applicable
rules and regulations, such securities may be resold without
registration under the Securities Act of 1933, as amended (the
"Securities Act"), only in certain limited circumstances. In this
connection, Shareholder represents that he is familiar with Securities
and Exchange Commission ("SEC") Rule 144, as presently in effect, and
understand the resale limitations imposed thereby and by the Securities
Act.
2.6.2. It is understood that the certificates evidencing the
shares of Alliant Common Stock shall bear the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, OR TRANSFERRED FOR VALUE IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT UNLESS AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT IS AVAILABLE."
2.6.3. Notwithstanding the foregoing, Alliant shall remove
the legend referred to in Section 2.6.2. upon the earliest of (1) a
transfer of the shares evidenced by such certificate pursuant to Rule
144, (2) the transfer of the shares pursuant to an effective
registration statement of Alliant under the Securities Act or (3) the
receipt by Alliant of an opinion of counsel reasonably acceptable to
Alliant, or a "no-action" letter from the staff of the SEC, to the
effect that the shares are no longer restricted.
2.7 Preliminary Balance Sheet. Golden shall deliver to Whiting,
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no later than September 15, 1998, an internally prepared balance sheet
reflecting the complete financial status of Golden, not including the Kensington
Interest, as of June 30, 1998, which will fairly represent in accordance with
generally accepted accounting principles, the financial condition of Golden as
of said date (the "Preliminary Balance Sheet"). Golden's net working capital
("Net Working Capital") shall be determined by deducting current liabilities
from current assets as reflected on the Preliminary Balance Sheet, disregarding
the Kensington Interest. As soon as practicable, but no later than thirty (30)
days after Whiting receives the Preliminary Balance Sheet, Whiting shall deliver
to Shareholder a written statement of any changes Whiting proposes to be made to
the Preliminary Balance Sheet. If Whiting fails to timely deliver a written
statement proposing changes, the Preliminary Balance Sheet shall be deemed to be
true and correct. Within fifteen (15) days of receipt of a written statement
proposing changes, Whiting and Shareholder shall meet and attempt to agree on a
Final Balance Sheet. If the parties fail to agree on the Final Balance Sheet
within such fifteen (15) day period, the disputed items shall be resolved by
submitting the same to Pricewaterhouse Coopers (the "Accounting Referee"). The
Accounting Referee shall resolve the dispute(s) regarding the Final Balance
Sheet within thirty (30) days after having the relevant materials submitted for
review. The decision of the Accounting Referee shall be binding on and
non-appealable by the parties. The fees and expenses associated with the
Accounting Referee shall be borne equally by Whiting and Shareholder, unless
otherwise provided in the Accounting Referee's award. Any increase in Net
Working Capital shall be promptly paid by Alliant to Shareholder in the form of
Alliant common stock determined as in Section 2.2.2 above. If there is a
decrease in Net Working Capital, Shareholder and Whiting shall direct the Escrow
Agent to promptly release sufficient shares of Alliant Common Stock determined
in accordance with Section 2.2.2 above from the Claims Escrow to satisfy the
amount of such decrease.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
Shareholder hereby represents and warrants to Alliant that, except as
described in the Shareholder Disclosure Schedule:
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3.1 Organization and Standing; Charter and Bylaws. Golden is a
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corporation duly organized and validly existing under, and by virtue of, the
laws of the State of Oklahoma and is in good standing under such laws. Golden
has the requisite corporate power to own and operate its properties and assets,
and to carry on its businesses as conducted. Golden is qualified, licensed or
domesticated as a foreign corporation in any jurisdiction where the nature of
its activities and of properties owned or leased by it makes such qualification,
licensing or domestication necessary at this time. Golden has furnished Whiting
with copies of its Certificate of Incorporation and Bylaws. Said copies are
true, correct and complete and contain all amendments through the date of this
Agreement.
3.2 Corporate Power. Golden has all requisite legal and
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corporate power to enter into this Agreement and to carry out and perform its
obligations under the terms of this Agreement.
3.3 Subsidiaries. Except for the Kensington Interest and other
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ownership interests disclosed in this Agreement and in the Exhibits hereto,
Golden does not, and at Closing, will not, own, directly or indirectly, shares
of stock or other interests in any corporation or any interest in a limited
liability company, partnership, joint venture, or other entity.
3.4 Capitalization. As of the date hereof, the authorized
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capital stock of Golden is 100,000 shares of common stock par value $0.01 per
share, of which 4,900 shares are issued and outstanding. The issued and
outstanding shares of Golden capital stock have been as of the date hereof, and
will be at the Closing Date, duly authorized, validly issued, fully paid and
nonassessable and issued in compliance with all applicable state and federal
laws concerning the issuance of securities. Shareholder is as of the date
hereof, and will be on the Closing Date, the owner of all of the issued and
outstanding shares of Golden capital stock. Other than as contemplated herein,
there are no outstanding rights, options, warrants, conversion rights, or
agreements for the purchase or acquisition from Shareholder or Golden of any
shares of Golden capital stock.
3.5 Authorization. All corporate action on the part of Golden
-------------
and its shareholder and directors necessary for the transaction contemplated in
this Agreement will have been taken prior to the Closing Date. This Agreement is
a legal, valid and binding obligation of each of Golden and Shareholder
enforceable against Golden and Shareholder in accordance with its terms, except
as limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application affecting enforcement of creditors' rights, and except as
limited by application of legal principles affecting the availability of
equitable remedies.
3.6 Financial Statements. The audited balance sheet of Golden
--------------------
and related statement of earnings for the fiscal year ended December 31, 1997
(the "Audited Financial Statements"), attached hereto as Exhibit E, have been
prepared in accordance with the principles described therein, and fairly present
the financial condition and results of operations of Golden as of the dates and
for the periods thereof.
3.7 Changes in Financial Condition. Since December 31, 1997:
------------------------------
(a) Golden has not entered into any transaction which was not in the ordinary
course of business; (b) there has been no change in the condition (financial or
otherwise), business, properties (including any change, destruction or loss
whether or not covered by insurance), assets or liabilities of Golden that
materially adversely affects Golden, except for changes as a result of drilling,
reworking or other customary oil and gas operations which have been consistent
(including changes in production rates on producing wells) or as a result of
general industry conditions (including prices) or other changes in the ordinary
course of business; and (c) Golden has not received notice that there has been a
loss of any of its major gas purchasers.
3.8 No Violation. The execution and delivery of this Agreement
------------
by Golden do not, and the performance of this Agreement by Golden will not,
(i) violate, or conflict with, or constitute a default under, or result in the
creation or imposition of any security interest, lien or encumbrance upon any of
its property or assets of Golden under any mortgage, indenture or agreement by
which the properties or assets of Golden are bound, the effect of which
violation, conflict or default would be material and adverse to the business of
Golden taken as a whole, or (ii) violate any statute or law or any judgment,
decree, order, writ, injunction, regulation or rule of any court or governmental
authority, the effect of which violation would be material and adverse to the
business of Golden taken as a whole.
3.9 Litigation. There are no actions, suits or governmental
----------
proceedings pending or, to Shareholder's knowledge, threatened against Golden,
or its properties, assets, operations or businesses (i) seeking to prevent the
consummation of the transactions contemplated hereby, or (ii) which would,
singly or in the aggregate, have a material adverse effect on the business of
Golden taken as a whole.
3.10 Compliance with Licenses and Laws. To Shareholder's
---------------------------------
knowledge, Golden possesses all governmental licenses, permits, certificates,
orders, approvals and authorizations necessary for the conduct of its business
(collectively, the "Permits") and is in compliance with the Permits, and with
all laws, ordinances, regulations and orders applicable to its business, except
where the failure to possess any Permits or the failure to be in such compliance
would not singly or in the aggregate, have a material adverse effect on the
business of Golden taken as a whole. To Shareholder's knowledge, all of the
wells included in the Oil and Gas Properties that have been drilled and
completed have been so drilled and completed within the boundaries and limits
permitted by contract, pooling or unit agreement, and by law; and all drilling,
completion, and other operations on or affecting the leases included in the Oil
and Gas Properties have been conducted in compliance with all applicable laws,
ordinances, rules, regulations and permits, and judgments, orders and decrees of
any court or governmental body or agency. No well is subject to penalties or
allowables after the date hereof because of any over-production or any other
violation of applicable laws, rules, regulations or permits or judgments, orders
of decrees of any court or governmental body or agency.
3.11 Governmental Consents. Other than consents or filings, if
---------------------
any, relating to transfers of Indian or Federal leases or transfers of
operatorship, no consent, approval, or authorization of, or designation,
declaration, or filing with, any governmental unit is required on the part of
Golden in connection with the valid execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.
3.12 Labor, Employment Contracts and Employee Benefit Programs.
---------------------------------------------------------
Golden is not a party to any collective bargaining agreement or employment
agreements, employee benefit plans, or any pending labor disputes entered into
or maintained for the benefit of its employees, other than a 401(K) Plan
maintained by Golden for the benefit of its employees to which Golden makes
quarterly contributions.
3.13 Taxes. Golden has timely filed all corporate tax returns
-----
that are required to have been filed prior to the date of this Agreement with
appropriate Federal, state, county and local governmental agencies or
instrumentalities and each of the returns correctly reflects the income and tax
liability required to be shown therein. Golden has paid for all income,
franchise, and other taxes due by them respectively as reflected on the returns.
There is no pending dispute with any taxing authority relating to any of the
returns which, if determined adversely to the taxpayer, would result in the
assertion by any taxing authority of any valid deficiency in a material amount
for taxes against Golden. Golden has properly paid all ad valorem, property,
production, severance, excise and similar taxes and assessments based on or
measured by the ownership of the Oil and Gas Properties or the production of
hydrocarbons or the receipt of proceeds therefrom that have become due and
payable before the date of this Agreement.
3.14 Environmental Matters.
---------------------
3.14.1 As used in this Agreement, "Environmental Laws"
shall mean any and all Federal, state and local laws, rules and
regulations, existing as of the date hereof, in all jurisdictions in
which Golden has done business or owned property that relate to:
(a) the prevention of pollution or environmental damage, (b) the
remediation of pollution or environmental damage, and/or (c) the
protection of the environment generally; including without limitation,
the Clean Air Act, as amended, the clean Water Act, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, the Federal Water Pollution Control Act, as amended,
the Resource Conservation and Recovery Act of 1976, as amended, the
Safe Drinking Water Act, as amended, the Toxic Substance and Control
Act, as amended, the Superfund Amendments and Reauthorization Act of
1986, as amended, the Hazardous and the Solid Waste Amendments Act of
1984, as amended, and the Oil Pollution Act of 1990, as amended.
3.14.2 Golden has conducted its business and operated its
assets, and is conducting its business and operating its assets, in
material compliance with Environmental Laws.
3.14.3 No condition or event has occurred with respect to
it or any such property that, with notice or the passage of time, or
both, would constitute a violation requiring action by Golden to
remedy, stabilize, neutralize, clean up or otherwise alter the
environmental condition of any such property where the aggregate cost
of such actions would be material to Golden.
3.14.4 Golden has not received notice from any
governmental agency or any other person or entity that the operation of
any facilities or any property ever owned, leased, or operated by it or
them, is or was in violation of any Environmental Laws or is
responsible (or potentially responsible) for remedying, establishing,
neutralizing, or cleaning up any pollutants, contaminants, or hazardous
or toxic waste, substances or materials at, on, or beneath any such
property where the aggregate cost thereof would be material to Golden.
3.14.5 To the knowledge of Shareholder, Golden has
obtained or applied for all environmental, health and safety permits
and authorizations (collectively "Environmental Permits") necessary for
the construction of its facilities and the operation of its business,
as presently conducted for the use, storage, treatments,
transportation, release, emission and disposal of raw materials,
by-products, wastes and other substances used or produced by or
otherwise relating to its business, and all such permits are in good
standing and in all material respects in full force and effect or,
where applicable, a renewal application has been timely filed, is
pending and agency approval is expected to be obtained, and Golden is
in compliance in all material respects with all terms and conditions of
all such Environmental Permits.
3.14.6 To the knowledge of Shareholder, the Oil and Gas
Properties do not contain naturally occurring radioactive materials
(NORM) that exceed the standards permitted by regulatory authorities in
the states in which such Oil and Gas Properties are located.
3.15 Guarantees and Other Obligations. Except for debts or other
--------------------------------
obligations appearing in the Audited Financial Statements or included in the
Data Rooms and excluding the guarantee of the debts of Kensington Tower
Partners, Limited Partnership, which will be assumed by Shareholder pursuant to
the Kensington Agreement prior to the Closing Date, Golden will not be on the
Closing Date a guarantor, surety, co-maker or other obligor on the debt or
liability of any person or entity except (i) routine bonds filed with
governmental agencies, and (ii) other liabilities assumed by Golden in its
capacity as operator or non-operator of oil and gas properties, which
liabilities are commonly assumed by an operator in the first instance and billed
to non-operators.
3.16 Affiliate Agreements. Golden is not subject to any agreement
--------------------
with any affiliate of Shareholder that cannot be terminated by Golden after
Closing without penalty, cost or liability.
3.17 Accuracy of Materials in Data Rooms. With respect to the
-----------------------------------
reserve reports, title opinions, contracts and other agreements containing
information respecting the nature, value or ownership of the Oil and Gas
Properties (the "Information"), which Information was made available by Golden
in the Data Rooms, to Shareholder's knowledge, the Information is true and
accurate in all material respects.
3.18 No Cash Balancing. Except as set forth in the Shareholder
----------------- -----------
Disclosure Statement, to Shareholder's knowledge, there are no Oil and Gas
- --------------------
Properties with respect to which (a) a gas overproduction/underproduction
balance exists, and (b) the applicable gas balancing agreement contains a
provision that would require a cash balancing payment upon the transfer of such
Oil and Gas Properties through a transaction of the nature contemplated in this
Agreement.
3.19 Take-or-Pay Deliveries. To Shareholder's knowledge, Golden
----------------------
neither has nor will have as of the Closing Date any obligation to deliver oil
or gas pursuant to any take-or-pay, prepayment or similar arrangement without
receiving full payment therefor.
3.20 AFE's. Except as set forth in the Shareholder Disclosure
-----
Statement, there are no outstanding authorizations for expenditures ("AFEs")
that (i) require the drilling of wells or other material development operations
in order to earn or to continue to hold all or any portion of the Oil and Gas
Properties, or (ii) obligate Golden to make payments of any amounts in
connection with drilling of wells or other material capital expenditures
affecting the Oil and Gas Properties.
3.21 No Encumbrances. There are no liens, mortgages, bonding or
---------------
encumbrances of any kind affecting the Oil and Gas Properties except for those
described in the notes to the Audited Financial Statements and for royalties and
overriding royalties that are of record as of the date of this Agreement and
that were used to calculate the net revenue interests set forth on Exhibit A.
----------
3.22 Documents. As used in this Agreement, the term "Existing
---------
Documents" shall mean all of the oil, gas and other mineral leases, assignments
or other instruments or agreements that affect the Oil and Gas Properties and
all contractually binding arrangements to which the Oil and Gas Properties may
be subject and which will be binding on the Oil and Gas Properties or Golden
after Closing (including, without limitation, oil, gas and other mineral leases,
overriding royalty assignments, farm-out and farm-in agreements, option
agreements, forced pooling orders, assignments of production payments, unit
agreements, joint operating agreements, balancing agreements, unit operating
agreements, production contracts, processing contracts, gas sales contracts,
marketing and transportation contracts and division orders). To Shareholder's
knowledge, (i) all Existing Documents are in full force and effect and are the
valid and legally binding obligations of the parties thereto and are enforceable
in accordance with their respective terms (subject to the effects of bankruptcy,
insolvency, reorganization, moratorium and similar laws); (ii) Golden is not in
material breach or default with respect to any of its obligations pursuant to
any such Existing Documents; and (iii) all payments (including, without
limitation, royalties, delay rentals, shut-in royalties and valid calls under
unit or operating agreements) due thereunder have been timely paid and Golden
has received no notice of default under any of the Existing Documents.
3.23 Equipment. The equipment included in the Oil and Gas Properties
---------
is in good working order and is operating or is capable of operating in
accordance with industry standards.
3.24 Independent Investigation. Shareholder has relied upon his
-------------------------
independent due diligence investigation and those of his representatives,
including his legal, tax, financial, business, and other advisors, in entering
into the transactions contemplated herein. Shareholder and his advisors have
been given the opportunity to examine all relevant documents, including the
Alliant SEC Documents described in Section 4.7 hereof, and to ask questions of
and receive answers from Alliant, Whiting, and persons acting on Alliant's
behalf, concerning all aspects of Alliant.
3.25 Investment. In addition to the representations made in
----------
Section 2.6.1, Shareholder understands the economic risks of an investment in
Alliant common stock and is able to bear such risks. Shareholder is acquiring
the Alliant Common Stock through the Exchange for his own account and not with a
view toward distribution, sale, subdivision or fractionalization.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF ALLIANT
Alliant hereby represents and warrants to Shareholder that, except as
described in the Alliant Disclosure Schedule attached hereto as Exhibit F:
---------
4.1 Organization and Standing; Charter and Bylaws. Alliant is a
---------------------------------------------
corporation duly organized and validly existing under, and by virtue of, the
laws of the State of Delaware and is in good standing under such laws. Alliant
has requisite corporate power to own and operate its properties and assets, and
to carry on its businesses as presently conducted and as proposed to be
conducted. Alliant is qualified, licensed or domesticated as a foreign
corporation in any jurisdiction where the nature of its activities and of
properties owned or leased by it makes such qualification, licensing or
domestication necessary at this time.
4.2 Corporate Power. Alliant has all requisite legal and
---------------
corporate power to enter into this Agreement and to carry out and perform its
obligations under the terms of this Agreement.
4.3 Capitalization. As of the date hereof, the authorized
--------------
capital stock of Alliant consists of 200,000,000 shares of common stock, par
value $.01. At the close of business on September 15, 1998, (i) 77,114,818
shares of Alliant Common Stock were outstanding, and (ii) no shares of Alliant
common Stock were held by Alliant in its treasury or by its wholly-owned
subsidiaries.
4.4 Authorization. All corporate action on the part of Alliant
-------------
and its shareholders and directors necessary for the transaction contemplated in
this Agreement has been taken . This Agreement is a legal, valid and binding
obligation of Alliant, enforceable against Alliant in accordance with its terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application affecting enforcement of creditors' rights,
and except as limited by application of legal principals affecting the
availability of equitable remedies.
4.5 No Violation. The execution and delivery of this Agreement
------------
does not, and the consummation of the transactions contemplated hereby will not
result in any violation pursuant to (i) any provision of the Articles of
Incorporation or Bylaws of Alliant , or (ii) any provisions of any loan or
credit agreement, note, mortgage, indenture, lease, or other agreement,
obligation, instrument, permit, concession, franchise, license or (iii) any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Alliant or its properties or assets, which violation, in the case of each of
clauses (i) and (ii), would have a material adverse effect on Alliant.
4.6 Consents and Approvals. No consent, approval, order or
----------------------
authorization of, or registration, declaration or filing with, any governmental
entity is required by or with respect to Alliant in connection with the
execution and delivery of this Agreement by Alliant or the consummation of the
transactions contemplated hereby, the failure to obtain which would have a
material adverse effect on Alliant, except for (i) the approval of the PUHCA
Application referred to in Section 6.7 hereof, (ii) the filing of such documents
with, and the obtaining of such orders from the various state authorities that
are required in connection with the transactions contemplated by this Agreement
and (iii) other such filings, authorizations, orders, and approvals of state and
local government authorities.
4.7 Alliant SEC Documents. Alliant has made available to
---------------------
Shareholder a true and complete copy of each report, schedule, registration
statement and definitive proxy statement filed by Alliant with the SEC since
January 1, 1998 (as such documents have since the time of their filing been
amended, the "Alliant SEC Documents") which are all the documents (other than
---------------------
preliminary materials) that Alliant was required to file with the SEC since such
date under the Securities Act and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). As of their respective dates, the Alliant SEC
-------------
Documents complied in all materials respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC Documents,
and none of the Alliant SEC Documents contained any untrue statement of a
material fact or omitted to state a materials fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial statements of Alliant
included in the Alliant SEC Documents comply as to form in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto, or
in the case of the unaudited statements, as permitted by Form 10-Q of the SEC)
and fairly present (subject, in the case of the unaudited statements, to normal,
recurring audit adjustments) the consolidated financial position of Alliant and
its consolidated subsidiaries as at the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended.
4.8 Common Stock. The Alliant Common Stock to be issued to
------------
Shareholder hereunder is duly authorized and, when issued in accordance with the
terms of this Agreement, will be validly issued, fully paid and nonassessable
(except as otherwise provided in Section 180.0622(2)(b) of the Wisconsin
Business Corporation Law).
4.9 No Undisclosed Material Liability. Except as disclosed in
---------------------------------
the Alliant SEC Documents, there are no liabilities of Alliant or any of its
subsidiaries of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, that has or would have a materials
adverse affect on Alliant other than liabilities adequately provided for on the
Balance Sheet of Alliant (including the notes thereof) contained in the
Quarterly Report of Alliant on Form 10-Q for the three-month period ended June
30, 1998.
4.10 Disclosure. This Agreement and the exhibits and schedules
----------
hereto, as they apply to Alliant , and all certificates of Alliant delivered to
Shareholder pursuant to this Agreement, when read together, do not contain any
untrue statement of a material fact and do not omit to state a material fact
necessary in order to make the statements contained therein or herein not
misleading.
4.11 Litigation. There are no actions, proceedings, or
----------
investigations pending or, to Alliant's knowledge, any threat thereof, which
question the validity of this Agreement or any other action taken or to be taken
in connection herewith or which would have a material adverse effect on Alliant.
4.12 Independent Investigation. Alliant has relied upon its
-------------------------
independent due diligence investigation and those of its representatives,
including its legal, tax, financial, business, and other advisors, in entering
into the transactions contemplated herein. Alliant and its advisors have been
given the opportunity to examine all relevant documents and to ask questions of
and receive answers from Shareholder and Golden and persons acting on their
behalf, concerning all aspects of Golden.
ARTICLE V.
TITLE AND ENVIRONMENTAL EXAMINATION; ADJUSTMENTS
5.1 Title Materials. From the date hereof to the Closing Date,
---------------
Golden shall provide Whiting full opportunity to examine the books, records and
files of Golden. Except as set forth in Section 3.17, Shareholder and Golden
make no warranty or representation, express or implied, with respect to the
accuracy or completeness of any title information, records or other data made
available to Alliant and Whiting in connection with this Agreement.
5.2 Title Defects.
-------------
5.2.1 Adjustments may be made to the Value of the Oil and
Gas Properties for purposes of calculating the Golden Value for either
Title Defects to the Oil and Gas Properties or increases to Golden's
interests in the Oil and Gas Properties in addition to the interests
set forth on Exhibit A. For purposes of this Section, the Oil and Gas
Properties are hereinafter referred to collectively as the "Examined
Interests." As used herein, the term "Title Defect" shall mean any
lien, claim, defect, encumbrance, security interest, burden or
deficiency such that Golden does not have Defensible Title (hereinafter
defined) to any of the Oil and Gas Properties; provided, however, that
no Permitted Encumbrance (hereinafter defined) shall constitute a Title
Defect.
5.2.2 As used herein, the term "Defensible Title" means
clear, unencumbered and uncontested title of record in Golden to the
Oil and Gas properties such that (i) after given effect to existing
spacing orders, operating agreements, unit agreements, unitization
orders and pooling designations, and after taking into account all
royalty interests, overriding royalty interests, net profit interests,
production payments and other burdens on production, Golden is entitled
to a share (expressed as a decimal) of all oil, gas and other minerals
produced from each well described in Exhibit A which is not less than
---------
the net revenue interest listed in Exhibit A in connection with the
---------
description of such well, (ii) Golden owns an undivided interest
(expressed as a decimal) equal to the working interest listed in
Exhibit A in connection with the description of each such well in and
---------
to all property and rights incident thereto, including all rights in,
to and under all agreements, leases, permits, easements, licenses and
orders in any way relating thereto, and in and to all wells, personal
property, fixtures and improvements thereon, appurtenant thereto or
used or obtained in connection therewith or with the production or
treatment or sale or disposal of hydrocarbons or water produced
therefrom or attributable thereto, (iii) Golden is obligated for a
fraction of the costs relating to the exploration, development and
operation of such well no greater than the working interest listed in
Exhibit A in connection with the description of such well, and (iv)
except as shown in Exhibit A Golden's interests in such wells and the
----------
production therefrom are not subject to being reduced by virtue of
reversionary interests owned by third parties, or by any existing
material failure on the part of Golden to comply with the terms and
conditions of any agreement, leases, permits, easements, licenses and
orders relating to such well and the personal property fixtures and
improvements thereon. When Golden's interest in an Oil and Gas Property
consists of a farmout or other agreement indicated on Exhibit A
---------
("Farmout") pursuant to which Golden is entitled to acquire an interest
in oil and gas leases, Defensible Title means that Golden has a written
Farmout agreement which is valid, binding and enforceable and when and
if performed by Golden entitled Golden to receive an assignment of oil
and gas leases sufficient to vest it with the working and net revenue
interest set forth on Exhibit A relating to such Oil and Gas Property
---------
and with a term remaining that will provide Golden with a reasonable
period of time to comply with the terms of the Farmout in order to earn
the interest, but in any event, not less than six months from the
Closing Date, except as set forth in Shareholder Disclosure Schedule.
--------------------------------
5.2.3 As used herein, the term "Permitted Encumbrances"
means:
(a) Royalties, overriding royalties, production
payments, reversionary interests, convertible interests, net profits
interests, division orders and similar burdens encumbering the Oil and
Gas Properties to the extent the net cumulative effect of such burdens
do not, operate to reduce the Net Revenue Interests of the Oil and Gas
Properties to less than the Net Revenue Interests set forth in Exhibit
A;
(b) All consents and similar contractual provisions
required in connection with the Exchange, if any, as to which, prior to
Closing, waivers or consents are obtained from the appropriate parties;
(c) All preferential rights to purchase applicable to
or arising by reason of the Exchange, if any, encumbering any one (1)
or more of the Oil and Gas Properties as to which, prior to Closing:
(a) waivers are obtained from the appropriate parties, or (b) the time
period for exercising said right has elapsed;
(d) All rights to consent by, required notices to,
filings with or other actions by a governmental entity or tribal
authority in connection with the Exchange;
(e) All rights reserved to or vested in a governmental
entity or tribal authority having appropriate jurisdiction to control
or regulate the Oil and Gas Properties in any manner whatsoever, and
all laws, regulations and orders of any such governmental entity or
tribal authority;
(f) Easements, rights-of-way, servitudes, surface
leases, sub-surface leases, grazing rights, logging rights, canals,
ditches, reservoirs, pipelines, utility lines, telephone lines, power
lines, railways, streets, roads, highways and structures on, over and
through the Oil and Gas Properties, to the extent such rights,
interests or structures do not materially interfere with the operation
thereof;
(g) The terms and conditions of all leases, units,
agreements, contracts, instruments, licenses and permits associated
with, attributable to or encumbering the Oil and Gas Properties which
have been filed with the appropriate governmental entity or tribal
authority, placed of record in the appropriate County records or
otherwise disclosed by Golden to Whiting;
(h) Liens for taxes or assessments not yet due or not
yet delinquent or, if delinquent, that are being contested by Golden in
good faith in the normal course of business, and if such liens or
assessments are delinquent and are being contested as of Closing,
Shareholder indemnifies Golden and Whiting with respect thereto;
(i) Liens of operators relating to obligations not yet
due or not yet delinquent or, if delinquent, that are being contested
by Seller in good faith in the normal course of business, and if such
liens are delinquent and are being contested as of Closing, Shareholder
indemnifies Golden and Whiting with respect thereto;
(j) Alleged Title Defect(s) which do not meet the
individual threshold amount set forth in Section 5.13 or which Whiting
has waived;
(k) Gas imbalances associated with the Oil and
Gas Properties as set forth in the Shareholder Disclosure Schedule; and
(l) Suspense funds associated with the Oil and Gas Properties.
5.3 Title Examination; Notice of Defects. Promptly after
------------------------------------
execution of this Agreement, Whiting shall, at Whiting's sole cost and expense,
commence and pursue such examination of title to the Examined Interests as
Whiting and Golden deems necessary or proper. Whiting will give notice to Golden
as soon as reasonably possible after discovery of any asserted Title Defects and
in any event conclude its title review and give final notice to Shareholder of
all asserted Title Defects affecting the Examined Interests not later than sixty
(60) days after the date of this Agreement (the "Title Notice Date"). Each such
notice shall include a brief description of each Title Defect of which notice is
being given, the action required to cure such Title Defect and the proposed
adjustment to the Value by reason of the existence of such Title Defect. Whiting
shall be deemed to have waived any Title Defects existing with respect to the
Examined Interests except to the extent such Title Defects are set out in a
notice given on or prior to the Title Notice Date.
5.3.1 Shareholder shall have a period of sixty (60) days
after the Title Notice Date (the "Cure Period") to cure all or any
portion of the Title Defects described in any notice(s) of Title
Defects affecting Examined Interests properly given by Whiting prior to
such date. In the event Shareholder is unable or unwilling to cure any
of the asserted Title Defects prior to the expiration of such Cure
Period, the parties shall proceed in accordance with Section 5.4 below.
5.4 Adjustments.
-----------
5.4.1 If any uncured Title Defect results in Golden
owning a net revenue interest less or a working interest more than that
shown on Exhibit A with respect to a particular Oil and Gas Property,
---------
then the Value of such Oil and Gas Property shall be reduced in the
same proportion that the actual net revenue interest bears to the net
revenue interest shown therefor on Exhibit A and the amount of such
---------
reduction shall be a downward adjustment to the Golden Value as
appropriate with respect to such Title Defect.
5.4.2 If any uncured Title Defect involves a claim
against or uncertainty with respect to Golden's title to a particular
Oil and Gas Property other than set forth in Sections 5.4.1 above or
5.4.3 below, the parties shall attempt to negotiate a mutually
acceptable reduction in the Value of the Oil and Gas Properties by
reason of such defect. In the event the parties agree on an appropriate
reduction in the Value, such amount shall constitute the downward
adjustment to the Golden Value as appropriate with respect to such
Title Defect. If the parties are unable to agree on an appropriate
reduction of Value for any such Title Defect and Whiting does not waive
the Title Defect, Shareholder shall have the option of (i) reducing the
Golden Value as appropriate by the Value of such item, or (ii)
referring to arbitration (to be conducted in accordance with the
procedures set forth in Section 5.6 hereof) the dispute concerning the
proper amount (not to exceed the Value) by reason of such Title Defect.
5.4.3 If, prior to the Title Notice Date, either
Shareholder or Whiting determines that the net revenue interest is
greater or the working interest is less in any Oil and Gas Property
owned by Golden than that set forth on Exhibit A, an upward adjustment
----------
shall be made to the Golden Value as appropriate with respect thereto.
The party discovering any such error promptly shall notify the other so
that the appropriate adjustment may be made.
5.5 Arbitration. In the event any Title Defect claim timely and
-----------
properly noticed by Whiting is referred by Shareholder to arbitration, a binding
arbitration proceeding promptly shall be conducted in Tulsa, Oklahoma, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). The arbitration proceeding shall be conducted by a single
arbitrator agreed to by the parties, or if they are unable to agree, selected by
the AAA. The arbitrator shall be a licensed attorney experienced in oil and gas
title examination in the jurisdiction in which the affected Oil and Gas
Properties are located. The decision of the arbitrator with respect to the
amount, if any, of the allowed claim for each Title Defect referred to
arbitration shall be conclusive and binding upon the parties; provided, however,
that in no event shall the allowed claim exceed the Value of the Oil and Gas
Property subject to the claimed Title Defect. The general expenses of
arbitration, including the fees of the AAA if necessitated by reason of the
failure of the parties to agree upon an arbitrator, shall be borne equally by
Shareholder and Whiting; however, each party shall bear and pay the fees and
expenses of its own witnesses, legal counsel and of the collection and
presentation of its evidence. The decision of the arbitrator shall be effected
by joint written instructions from the parties to the Escrow Agent for the
Claims Escrow.
5.6 Disposition of Properties. If at the expiration of the Cure
-------------------------
Period, Shareholder has been unable to cure Title Defects to the reasonable
satisfaction of Whiting or if it is determined pursuant to arbitration conducted
under Section 5.5 that a Title Defect exists that affects the Value of an Oil
and Gas Property, then in either case, Shareholder may elect that the affected
Oil and Gas Property be conveyed to him or an affiliated entity. In such an
event, Whiting and Shareholder shall direct the Escrow Agent to promptly release
sufficient Escrow Shares determined in accordance with Section 2.2.2 above from
the Claims Escrow equal to the Value of the interest being transferred to
Shareholder.
5.7 Special Warranty of Title. Shareholder and Golden make no
-------------------------
warranty of title to the Oil and Gas Properties, express or implied, except that
Shareholder shall defend the Oil and Gas Properties against the claims and
demands of every person claiming the same or any portion thereof, by, through
and under Golden or by any of Golden's predecessors-in-title that are or were
controlled by Shareholder, but not otherwise.
5.8 Environmental Conditions. The Oil and Gas Properties have
------------------------
been used for oil and gas drilling, production, related oil field operations and
possibly for other operations, whether of a similar or dissimilar nature.
Physical changes in or under the Oil and Gas Properties or adjacent lands may
have occurred as a result of such uses. The Oil and Gas Properties also may
contain buried pipelines and other equipment, whether or not of a similar
nature, the locations of which may not be known to Golden or be readily apparent
by physical inspection of the Oil and Gas Properties. Third parties may use the
Oil and Gas Properties or the surface rights thereon for other purposes as well.
Alliant and Whiting understand that Golden and Shareholder may not have the
requisite information with which to determine the exact nature or condition of
the Oil and Gas Properties nor the effect of any such use it has had on the
physical condition of the Oil and Gas Properties. Alliant and Whiting are hereby
notified that detectible amounts of regulated and unregulated chemicals and
other substances which may pose a threat to health or to plants or wildlife or
which are known to cause illnesses, diseases, cancer, birth defects and other
reproductive harm, may be found in, on or around the Oil and Gas Properties.
Adverse physical conditions, including the presence of such chemicals and other
substances, may not be revealed by Alliant's or Whiting's investigation.
5.9 Environmental Assessment. Whiting shall have the right, at
------------------------
its sole cost, risk, and expense, to undertake an environmental assessment of
the Oil and Gas Properties during the period ending on the Title Notice Date.
Whiting and its agents shall have the same right as Golden to enter upon the Oil
and Gas Properties, inspect the same, conduct soil and water sampling, analysis
and monitoring, including soil borings (and, after notice and consultation with
Golden, drilling groundwater monitoring wells), and generally conduct such
tests, examinations, investigations and studies as Whiting deems necessary or
appropriate for preparing appropriate engineering and other reports and making
judgments relating to the Oil and Gas Properties, their condition, and the
presence of chemicals and other substances. Golden shall cooperate with any
efforts of Whiting and its agents to obtain third party consents for access to
those parcels of land within the Oil and Gas Properties to which Whiting may not
presently have access. Whiting and its agents shall have reasonable access to
Golden's agents and employees in the course of conducting Whiting's
environmental assessment. Golden has caused to be provided to Whiting copies of
all reports, citations, notices and complaints relating to environmental matters
affecting the Oil and Gas Properties which it has in its possession or of which
it is aware and can obtain without unreasonable effort or expense. Whiting
agrees to provide to Golden a copy of all facts discovered in the course of
conducting Whiting's environmental assessment, including all direct observations
(if in writing or other tangible or transferable medium), data and summaries
thereof. Whiting shall keep any data or information acquired in the course of
such examinations and the results of all analyses of such data and information
strictly confidential and not disclose same to any person or agency without the
prior written approval of Golden, except that Whiting may disclose to
authorities having jurisdiction such information as is required by law or by
court order at the same time that Whiting provides such information to Golden.
If Whiting believes that conditions on an Oil and Gas Property do not satisfy
the environmental standard set forth in Section 5.11 below (an "Environmental
Defect"), then Whiting may notify Shareholder of such condition by providing
Shareholder, on or prior to the Title Notice Date, a written "Notice of
Environmental Defect" setting forth in detail the facts giving rise to the
claimed defect, the environmental standard which Whiting claims is not
satisfied, any Environmental Law which Whiting contends has been breached or
violated and, if the claimed defect arises from information contained in a
document, a copy of such document or the relevant parts thereof.
5.10 Indemnification. Whiting waives and releases all claims
---------------
against, and shall indemnify and hold harmless, Shareholder and Golden, and its
directors, officers, employees and agents, for injury to or death of persons or
damage to property arising in any way from the exercise of rights to make an
environmental assessment of the Oil and Gas Properties granted to Whiting hereby
or the activities of Whiting or its employees, agents or contractors on the Oil
and Gas Properties, provided that Whiting does not hereby assume the risk of
damage, injury or death attributable to the willful misconduct or gross
negligence of Shareholder or Golden. Notwithstanding any provision of this
Agreement to the contrary, the foregoing obligation of indemnity shall survive
the Closing or the termination of this Agreement without Closing.
5.11 Environmental Standards. An Environmental Defect shall exist if:
-----------------------
5.11.1 The operation, condition or use of the Oil and Gas
Properties shall be such as to subject Golden to a liability for
violation of any Environmental Laws.
5.11.2 There exist agreements, consent or administration
orders, injunctions, decrees, judgments, license or permit conditions,
or other directives of governmental authorities based on any
Environmental Laws that require any change in the present condition of
the Oil and Gas Properties, or Golden has received any notice from any
governmental authority or private or public entity advising Golden that
it is or is potentially responsible for response costs under an
Environmental Law as a result of the ownership or activities in
connection with the Oil and Gas Properties.
5.11.3 Conditions or circumstances exist on the Oil and Gas
Properties that would subject Golden to any damages, penalties,
injunctive relief or cleanup costs under any Environmental Law or that
would require cleanup, removal, remedial or corrective action or other
response involving a material expenditure by Golden pursuant to any
Environmental Law.
5.11.4 The Oil and Gas Properties have been used for the
generation, treatment, storage or disposal of a Hazardous Substance (as
defined below) in an manner or to an extent that would subject Golden
to liability for violation of any Environmental Laws. To the knowledge
of Shareholder, except as disclosed in Shareholder Disclosure Schedule,
there has not been a release or discharge of a Hazardous Substance from
the Oil and Gas properties in a manner or to an extent that would
subject Golden to a liability for violation of any Environmental Laws.
"Hazardous Substance" shall mean any hazardous chemicals, materials,
substance, pollutant, contaminant, solid or hazardous waste, hazardous
waste constituents, hazardous material or toxic substance subject to
regulation or liability under Environmental Laws in force as of the
date hereof, including petroleum and petroleum products, asbestos,
radioactive substances, PCB's and any other substance or material that
would constitute or cause a health, safety or environmental hazard on
or at the Oil and Gas Properties under Environmental Laws.
5.12 Oil and Gas Properties Subject to Environmental Defect.
------------------------------------------------------
Shareholder shall have a period of sixty (60) days after the Title Notice Date
to cure or remediate the environmental defects set out in any Notice of
Environmental Defect timely and properly given by Whiting. In the event
Shareholder is unable or unwilling to cure or remediate any such defect, one of
the following shall occur:
5.12.1 The parties shall agree upon an adjustment to the Value
of the affected Oil and Gas Property to compensate Golden (i) for the
defect and future liability associated therewith or resulting
therefrom, and (ii) for agreeing to indemnify, defend and hold harmless
Shareholder from and against any and all loss, cost, liability or
expense associated therewith or resulting therefrom.
5.12.2 If the parties are unable to reach agreement pursuant
to 5.12.1 above, Shareholder may elect either (i) to require Golden to
assign the affected Oil and Gas Property to a third party (which may be
an affiliated entity of Shareholder) and reduce the Golden Value by the
Value of such Oil and Gas Property, or (ii) to cause Golden to assign
to such third party the affected Oil and Gas Property together with any
other Oil and Gas Properties of Shareholder's and Whiting's choosing
having Values sufficient to offset, in Shareholder's and Whiting's
mutual judgment, the estimated cost of remediation or cure of the
defect, and to reduce the Golden Value by the sum of the Values
thereof.
5.13 Minimum and Maximum Adjustment. Notwithstanding the
------------------------------
provisions of this Article V, there shall not be an adjustment of the Golden
Value for any Title Defects or Environmental Defects unless the individual value
of each Title Defect or Environmental Defect exceeds $10,000 and the cumulative
aggregate amount of all such adjustments to the Values exceeds $200,000. In the
event the aggregate adjustment to the Values for Title Defects and Environmental
Defects exceeds $2,000,000, then either Shareholder or Alliant may terminate
this Agreement prior to Closing by written notice to the other without further
liability by any of the parties hereto.
5.14 Asbestos and NORM. Whiting and Alliant acknowledge that the
-----------------
Oil and Gas Properties may currently or have in the past contained asbestos or
NORM and that special procedures may be required for the assessment,
remediation, removal, transportation or disposal of such asbestos and NORM.
Notwithstanding anything contained in this Agreement to the contrary, following
Closing, Whiting and Alliant agree to accept full responsibility for and shall
pay all costs and expenses associated with the assessment, remediation, removal,
transportation and disposal of the asbestos or NORM associated with the Oil and
Gas Properties, and shall not be entitled to claim the fact the assessment,
remediation, removal, transportation or disposal of the asbestos or NORM is not
complete or that additional cost will be required to complete the assessment,
remediation, removal, transportation or disposal of the asbestos or NORM as a
Title Defect, Environmental Defects, breach of any of Shareholder's or Golden's
representations and warranties (other than a breach of Section 3.14.6 hereof) or
indemnity obligations under this Agreement, and Alliant and Whiting (on behalf
of themselves, their officers, agents, employees, affiliates, successors and
assigns) irrevocably waive such claims.
5.15 Disclaimer. Except as expressly set forth in this Article V
----------
and in Article III, Shareholder hereby expressly disclaims any and all
representations and warranties concerning the Oil and Gas Properties, express,
statutory, implied or otherwise, including without limitation: (a) any warranty
of title (except for the special warranty of title set forth in Section 5.7),
(b) the existence of any and all prospects, (c) the geographic, geologic or
geophysical characteristics associated with any and all prospects, (d) the
existence, quality, quantity or recoverability of hydrocarbon reserves
associated with the Oil and Gas Properties, (e) the costs, expenses, revenues or
receipts associated with the Oil and Gas Properties, (f) the contractual,
economic or financial data associated with the Oil and Gas Properties, (g) the
continued financial viability or productivity of the Oil and Gas Properties, (h)
the environmental or physical condition of the Oil and Gas Properties, (i) the
federal, state, local or tribal income or other tax consequences associated with
the Oil and Gas Properties, or the agreements to which the Oil and Gas
Properties are subject, (j) the absence of patent or latent defects, (k) safety,
(l) state of repair, (m) merchantability, and (n) fitness for a particular
purpose; and Alliant and Whiting (on behalf of themselves, and their respective
officers, agents, employees, affiliates, successors and assigns) irrevocably
waive such claims.
ARTICLE VI.
ADDITIONAL AGREEMENTS
6.1 Files and Records. On the Closing Date, Shareholder shall
-----------------
deliver to Whiting originals (or copies, if unavailable) of all corporate and
business records of Golden and all property files, well logs, well files,
division orders, title documentation, contracts, land files, maps,
non-interpretive seismic information and all other records and data relating to
the Oil and Gas Properties; provided that, Shareholder shall be entitled to
retain, at his expense, copies of such general corporate and financial records
as Shareholder deems appropriate.
6.2 Excluded Assets. At the Closing, Golden shall assign and
---------------
convey to Shareholder by instruments of conveyance and transfer in form and
substance satisfactory to Whiting and Shareholder, but without any warranty of
title, all of the Excluded Assets. The Excluded Assets shall consist of all
personal property not directly related to the Oil and Gas Properties, including
furniture and equipment, office supplies, phone numbers, office leases, contract
rights not directly related to the Oil and Gas Properties, rights to use the
word "Golden" in its name (once the necessary action has been taken and the
necessary filings have been made to change the name of such company), the
existing logo and trademark of Golden, software programs (proprietary or
otherwise), rights to Dwights Information Service and Petroleum Information
subscriptions and rights to use the Dwights Power Tools software, and all maps
and files and other data relating to prospects or prospect generation activities
for prospects not included in the Oil and Gas Properties. All personal property
transferred to Shareholder will be transferred on an AS-IS and WITH ALL FAULT
basis, without warranty, express or implied, as to condition, quality,
merchantability or fitness therefor for a particular purpose.
6.3 Shareholder Guarantees. Shareholder has personally
----------------------
guaranteed certain obligations of Golden as set forth at Exhibit H. Alliant and
---------
Whiting agree to use their best efforts to cause Shareholder to be removed as a
guarantor of any obligation of Golden within forty-five (45) days of Closing.
Alliant and Whiting each agree to indemnify and hold Shareholder harmless from
and against any and all Damages with respect to such guarantees if the
transaction closes.
6.4 Pending Claims. The parties agree that Shareholder shall
--------------
receive 50% of the net consideration, if any, received after the Effective Date
from pending claims against PEPL and NORAM relating to past production. This
payment to Shareholder shall be in the form of Alliant common stock based on the
mean average of the closing prices for Alliant common stock for the five trading
days immediately preceding the distribution date and be made within 30 days of
receipt of settlement proceeds.
6.5 Termination of 401(K) Plan. Prior to the Closing Date,
--------------------------
Shareholder shall cause Golden to terminate its 401(K) Plan and to notify all
employees covered by such Plan of such termination, all in compliance with the
Plan documents and applicable laws, rules and regulations.
6.6 Termination of Employment. Unless Whiting or Alliant
-------------------------
provides Shareholder with written notice to the contrary, Shareholder shall
cause Golden to terminate the employment of each of Golden's employees effective
no later than the Closing Date. Golden shall be responsible for paying such
employees for the accrued vacation and other accrued employee benefits scheduled
on the Shareholder Disclosure Statement. Any severance paid such employees shall
be the responsibility of Shareholder and included in the Golden Value
computation at Section 2.2(iv). Shareholder shall indemnify and hold harmless
Alliant, Whiting and Golden against any claims by such employees relating to
their termination.
6.7 PUHCA Application. Alliant has filed, or will file within
-----------------
ten (10) days of the date it signs this Agreement , an application on Form U-1
with the SEC under the Public Utility Holding Company Act of 1935, as amended
(the "PUHCA Application"), seeking such agency's approval of the issuance of
Alliant common stock for the purposes of the transactions contemplated by this
Agreement.
ARTICLE VII.
CONDITIONS TO SHAREHOLDER'S AND GOLDEN'S OBLIGATIONS
The obligations of Shareholder and Golden to close the transaction on
the Closing Date are subject, unless waived by Shareholder or Golden, to the
satisfaction, on or prior to the Closing Date, of each of the following
conditions:
7.1 Representations, Warranties and Covenants. All
-----------------------------------------
representations and warranties of Alliant contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date as if
such representations and warranties were made at and as of the Closing Date, and
Alliant shall have performed in all material respects all agreements and
covenants required hereby to be performed by them prior to or at the Closing
Date.
7.2 Consents. All consents, approvals and waivers from
--------
governmental authorities and other parties necessary to permit Alliant to carry
out the transactions as contemplated hereby shall have been obtained, including
the approval by the SEC of the PUHCA Application.
7.3 No Governmental Proceeding or Litigation. No suit, action,
----------------------------------------
investigation, inquiry or other proceeding by any governmental authority or
other person shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby and which could
reasonably be expected to adversely affect the transactions contemplated
hereunder.
ARTICLE VIII.
CONDITIONS TO ALLIANT'S OBLIGATION
The obligation of Alliant to close the transaction on the Closing Date
is subject, unless waived by Alliant, to the satisfaction, on or prior to the
Closing Date, of each of the following conditions:
8.1 Representations, Warranties and Covenants. All
-----------------------------------------
representations and warranties of Shareholder contained in this Agreement shall
be true and correct in all material respects at and as of the Closing Date as if
such representations and warranties were made at and as of the Closing Date, and
Shareholder and Golden shall have performed in all material respects all
agreements and covenants required hereby to be performed by them prior to or at
the Closing Date.
8.2 Consents. All consents, approvals and waivers from
--------
governmental authorities and other parties necessary to permit each of
Shareholder and Golden to carry out the transactions as contemplated hereby
shall have been obtained.
8.3 No Governmental Proceeding or Litigation. No suit, action,
----------------------------------------
investigation, inquiry or other proceeding by any governmental authority or
other person shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby and which could
reasonably be expected to adversely affect the transactions contemplated
hereunder.
8.4 Terminations. Shareholder shall have satisfied the requirements
------------
of Sections 6.5 and 6.6.
ARTICLE IX.
THE CLOSING PROCEDURE
9.1 Closing Documents.
-----------------
9.1.1 At the Closing, Alliant shall deliver or cause to
be delivered to Golden:
(a) A certified copy of resolutions of Alliant's Board
of Directors authorizing the execution of this Agreement and
the consummation of the transactions contemplated hereby,
including the issuance of Alliant's Common Stock pursuant to
the Exchange.
(b) A certificate signed by an appropriate officer of
Alliant stating that the warranties and representations of
Alliant under this Agreement are true and correct as of the
Closing Date and Alliant has complied in all materials
respects with all of its obligations and agreements required
to be performed prior to the Closing.
9.1.2 At the Closing, Golden shall deliver to Alliant:
(a) Certified copies of the Certificate of Incorporation
of Golden.
(b) A certified copy of the resolutions of Golden's
Board of Directors and stockholders as required for valid
approval of the execution of this Agreement and the
consummation of the transactions contemplated hereby,
including the Exchange.
(c) A certificate signed by Shareholder stating that
the warranties and representations of Shareholder under this
Agreement are true and correct as of the Closing Date, and
that Shareholder and Golden have compiled in all materials
respects with all of their obligations and agreements required
to be performed prior to the Closing.
(d) Releases of any liens and encumbrances (other than
Permitted Encumbrances) on Golden's properties and delivery of
all of Golden's files and records pursuant to Section 6.1.
9.1.3 At the Closing, Shareholder shall deliver to Alliant an
instrument signed by Kensington Tower Partners, Limited
Partnership, (i) evidencing the termination of its office
lease with Golden and (ii) releasing Golden from any further
obligations or liability thereunder.
9.1.4 In addition, at the Closing, the parties shall execute
and deliver such other documents and take such other actions
as are required by this Agreement or as any party may
reasonably require.
ARTICLE X.
CONDUCT OF BUSINESS PENDING CLOSING
10.1 During the period from the Effective Date to the date
hereof, Golden has conducted and, from the date hereof to the Closing Date,
Golden will conduct, its operations according to its regular, ordinary and usual
course of business in substantially the same manner as conducted in the past and
has endeavored and will endeavor to preserve its relationship with third parties
to the end that the goodwill and ongoing business shall not be impaired in any
material respect and to maintain its records and books of accounts in a manner
that fairly and correctly reflects its income, expenses, assets and liabilities.
From the Effective Date to the date hereof, except as described on the
Shareholder Disclosure Statement, Golden has not done, and from the date hereof
to the Closing Date, without the prior written consent of Alliant or Whiting,
Golden will not do, any of the following:
10.1.1 Pay or incur any obligation or liability, absolute or
contingent, other than current liabilities incurred in the ordinary
course of business.
10.1.2 Except for endorsement, for collection or for deposit,
of negotiable instruments received in the ordinary course of business,
incur any indebtedness for borrowed money, assume, guarantee, endorse
or otherwise as accommodation become responsible for obligations of
other individuals, firms or corporations, or make any loans or advances
to any individual, firm or corporation.
10.1.3 Declare or pay any dividends or make any payment or
distribution to stockholders as such, issue any capital stock or
purchase or otherwise acquire for value any of its outstanding capital
stock or grant options, warrants or rights to purchase or redeem any
shares of its capital other than as contemplated in Article I of this
Agreement.
10.1.4 Mortgage, pledge or subject to lien or other
encumbrance any of its properties or assets.
10.1.5 Sell or transfer any of its properties or assets except
as provided in Article I, or except in the ordinary course of business
or without appropriate consideration, cancel, release or assign any
indebtedness owed to it or any claims held by it.
10.1.6 Except for capital expenditures on the Oil and Gas
Properties for drilling development or work over activities as set
forth on the Shareholder Disclosure Schedule, make any investment of a
-------------------------------
capital nature either by the purchase of stock or securities (other
than United States Governmental securities), contributions to capital,
property transfers or otherwise, or by the purchase of any property or
assets of any other individual, firm or corporation.
10.1.7 Make any material change in its insurance, or other
commitments or arrangements, or enter into (1) any agreement not
subject to termination without liability on notice of thirty (30) days
or less; (2) any contract for the purchase or sale of any materials,
products or supplies other than such contracts incurred in the ordinary
course of business; (3) any contract for the purchase or sale of any
materials, products, or supplies, the total contract price of which
exceeds $25,000, or which contains an escalator, renegotiation or
redetermination clause or which commits it for a fixed term; (4) any
management or consultation agreement; (5) any lease, license, royalty
or union agreement; or (6) any other agreement not in the ordinary
course of business.
10.1.8 Increase in any manner the compensation of any of its
officers or executive employees, or pay or agree to pay any pension or
retirement allowance not required by any existing open commitment to
any of such officers or employees, or commit itself to any additional
pension, retirement or profit-sharing plan or agreement or employment
agreement with or for the benefit of any officer, employee or other
person, except as allowed in Section 6.6 of this Agreement.
10.1.9 Take any action which would interfere with or prevent
performance of this Agreement.
10.1.10 Take any action to liquidate or dissolve Golden.
10.1.11 Fail to use reasonable effort to maintain all existing
permits, licenses, franchise or other rights which are material to
operations.
10.1.12 Take action to make or rescind any express or deemed
election relating to taxes with respect to its business, settle or
compromise any claims, suits or other proceedings relating to taxes or
change any methods used for reporting income or deductions for tax
purposes.
10.1.13 Allow any additional burdens to be placed against the
Oil and Gas Properties which would reduce the net revenue interests or
increase the working interests from those shown on Exhibit A.
ARTICLE XI.
PAYMENT OF EXPENSES; BROKERS AND AGENTS
All costs and expenses, including, without limitation, legal fees and
other costs and expenses, incurred by each party hereto, in connection with this
Agreement or in consummating the transactions contemplated hereby, shall be paid
by such party. All parties represent that, except for Larry G. Akers, Consultant
L.L.C., which Shareholder represents has been retained by Shareholder to assist
and advise him in connection with the transactions contemplated by this
Agreement, they have not, directly or indirectly, employed any broker finder or
intermediary in connection with such transactions who might be entitled to a fee
or commission upon the execution of this Agreement or consummation of the
transactions contemplated hereby. Shareholder shall pay the fees of Larry G.
Akers, Consultant L.L.C.
ARTICLE XII.
TERMINATION
This Agreement may be terminated under any of the following
circumstances by notice given on or before the Closing Date:
12.1 Mutual Agreement. This Agreement may be terminated by the
----------------
mutual written agreement of the parties any time prior to the Closing,
regardless of whether approval of this Agreement and the Exchange shall have
previously been obtained.
12.2 By Any Party. Any party hereto shall have the right to
------------
terminate this Agreement (i) in the event that there shall be any actual or
threatened litigation challenging the validity or legality of this Agreement or
the consummation thereof or seeking to restrain or invalidate any of the
transactions contemplated hereunder which would, in the judgment of such party
acting reasonably based upon the advice of counsel, involve material expense or
lapse of time which would be materially adverse to the interests of such party;
or (ii) the conditions to Closing in favor of such party are not satisfied.
12.3 Denial of PUHCA Application. This Agreement shall
---------------------------
automatically terminate if the SEC denies the PUHCA Application and Alliant
notifies Shareholder that it has determined in its sole judgment not to appeal
such denial. Either party may terminate this Agreement upon written notice to
the other party if approval of the PUHCA Application is not obtained on or
before December 31, 1998.
12.4 Rights on Termination. If this Agreement is terminated
---------------------
pursuant to the provisions of Sections 12.1, 12.2 or 12.3, above, this Agreement
shall forthwith become void, and there shall be no further obligation on the
part of any party hereto except with respect to the confidentiality provisions
of Section 14.9.
12.5 Waiver. Any party hereto may, at its election, waive any of
------
its rights to terminate this Agreement under the foregoing provisions, and shall
be deemed to have waived such rights upon completion of the Closing under this
Agreement, subject to the provision of Section 5.14.
ARTICLE XIII.
INDEMNIFICATION
13.1 By Shareholder.
--------------
13.1.1 Notwithstanding any investigation conducted before or
after the Closing, Shareholder shall indemnify and hold harmless
Alliant, Whiting and Golden in respect to any and all out-of-pocket
monies, losses, damages, liabilities and expenses (including, without
limitation, settlement costs and any legal, accounting and other
expenses for investigating or defending any actions or threatened
actions) (hereinafter "Damages") reasonably incurred by Alliant,
Whiting or Golden in connection with each and all of the following (a
"Claim"):
(a) Any breach of any representation or
warranty made by Shareholder in this Agreement or in any document or
instrument delivered by Shareholder or Golden pursuant to this
Agreement; and
(b) The breach of any agreement or obligation
of Shareholder or Golden contained in this Agreement or in any document
or instrument delivered by them pursuant to this Agreement.
13.1.2 Except as provided in the last sentence of this
Section 13.1.2, anything to the contrary herein not withstanding,
Shareholder shall only be liable to Alliant, Whiting or Golden for any
Claims to the extent (i) the individual amount of any Claim exceeds
$10,000, and (ii) the aggregate amount of Claims thereunder exceeds
$200,000. Shareholder's aggregate liability for all Claims shall not
exceed in any event the Claims Escrow and Shareholder shall have no
obligation hereunder with respect to any particular claim, unless
Whiting shall have given written notice thereof in the manner provided
in Section 13.3 below no later than eighteen (18) months after the date
of this Agreement (the "Release Date"). The provisions of this Section
13.1.2 shall not apply to a breach of a representation or warranty set
forth in Sections 3.1 through 3.5 and 3.8 hereof.
13.2 By Alliant.
----------
13.2.1 Alliant shall indemnify and hold harmless the
Shareholder in respect of any and all Damages reasonably incurred by
Shareholder in connection with each and all of the following Claims:
(i) Any breach of any representation, or warranty
made by Alliant in this Agreement or in any document or
instrument delivered by it pursuant to this Agreement; and
(ii) The breach of any agreement or obligation
of Alliant or Whiting contained in this Agreement or in any
document or instrument delivered by them pursuant to this
Agreement.
13.2.2 Except as provided in the last sentence of this
Section 13.2.2, anything] to the contrary herein notwithstanding,
Alliant shall only be liable for any Claims to the extent the aggregate
amount of the Claims exceed $200,000. Alliant's aggregate liability for
all Claims shall not exceed in any event the sum of $2,000,000. Alliant
shall have no obligation hereunder with respect to any particular Claim
unless it has received the written notice thereof in the manner
provided in Section 13.3 below no later than the Release Date, provided
that nothing herein shall limit the obligation of Alliant to indemnify
Shareholder under Section 6.3. The provisions of this Section 13.2.2
shall not apply to a breach of a representation or warranty set forth
in Sections 4.1 through 4.5 and 4.8 hereof.
13.3 Procedures.
----------
13.3.1 If, prior to the Release Date, a party shall incur or
receive notice of the existence of any Claim for which such party
claims indemnity hereunder (the "Indemnitee"), the Indemnitee shall
promptly give written notice thereof to the other party (the
"Indemnitor"). The Indemnitee shall furnish to the Indemnitor in
reasonable detail such information as the Indemnitee may have with
respect thereto (including, in any case, copies of any summons,
complaint or other pleading which may have been served on it and any
written claim, demand, invoice, billing or other document evidencing or
asserting the same); provided, however, that no failure or delay by the
Indemnitee in the performance of the foregoing prior to the Release
Date shall reduce or otherwise affect the obligation of the Indemnitor
to indemnify and hold the Indemnitee harmless, except to the extent
that such failure or delay shall have actually impaired the
Indemnitor's ability to defend against, settle or satisfy such
liability, damage, loss, claim or demand, or increased the cost
thereof.
13.3.2 In the event of asserted liabilities to and claims and
demands of third parties, including any action, suit or proceeding
related thereto, which would serve as a basis for a Claim, unless
within thirty (30) business days after notice the Indemnitor elects to
assume the defense thereof with counsel acceptable to Indemnitee, the
Indemnitee shall have the right to pay, compromise, settle or otherwise
dispose of any claim or conduct the defense or settlement of any
action, suit or proceeding as the Indemnitee shall deem appropriate;
provided, however, that if the Indemnitee or Indemnitor shall pay any
Claim or settle any suit, action or proceeding without the written
consent of the other, the right of the Indemnitee to make any claim
against the Indemnitor shall neither be deemed conclusively established
nor conclusively denied. The party not responsible for the defense
shall have the right to be represented by advisory counsel and
accountants (at its own expense) in connection with any action, suit or
proceeding, and shall be kept reasonably informed by the defending
party of such action, suit or proceeding at reasonable times at all
stages thereof, whether or not such party is so represented. The
Indemnitee and Indemnitor agree to make available to each other, their
counsel and accountants all information and documents reasonably
available to them which relate to such action, suit or proceeding, and
Indemnitee and Indemnitor agree to render to each other such assistance
as they may reasonably require of each other in order to ensure the
proper and adequate defense of any such action, suit or proceeding.
13.3.3 Notwithstanding anything in this Agreement to the
contrary, any liabilities of the Indemnitor on account of any
indemnification hereunder shall be satisfied solely by exercise of the
Indemnitee's rights under this Agreement, provided that nothing in this
Agreement shall be deemed to limit any right or remedy of the
Indemnitee or any other person against any other person for the fraud
or criminal activity of such other person.
13.4 Return of Documents. If this Agreement is terminated prior
-------------------
to Closing, Alliant and Whiting shall promptly return to Golden all books,
records, maps, files, papers, and other property in either of their possession
relating to the transaction contemplated herein.
ARTICLE XIV.
MISCELLANEOUS
14.1 Full Access. Golden shall, during normal business hours,
-----------
afford to the officers and authorized representatives of Whiting reasonable
access to Golden's properties, books and records, officers, employees,
accountants, counsel and other representatives, in order that they may have full
opportunity to make such investigations as they shall desire of the affairs of
Golden; and Golden will furnish Whiting with such additional financial and
operating data and other information as to Golden's business and properties as
Whiting shall from time to time reasonably request.
14.2 Waivers. At any time prior to the Effective Date, the
-------
parties hereto may, to the extent legally allowed, extend the time for
performance of any obligations or other acts of the other parties hereto, waive
any inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto and waive performance of any of the
covenants or agreements or satisfaction of any of the conditions contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in a written instrument signed on behalf
of such party. Except as provided in this Agreement, no action taken pursuant to
this Agreement, including any investigation by or on behalf of any party, shall
be deemed to constitute a waiver by the party taking such action of compliance
with any representations, warranties, covenants or agreements contained in this
Agreement. The waiver by any party hereto of a breach of any provision hereof
shall not operate or be construed as a waiver of any prior or subsequent breach
of the same or any other provisions hereof.
14.3 Governing Law. This Agreement shall be governed in all
-------------
respects by the laws of the State of Oklahoma as such laws are applied to
agreements between Oklahoma residents entered into and to be performed entirely
within Oklahoma.
14.4 Successors and Assigns. Except as otherwise expressly
----------------------
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors, and administrators of
the parties hereto. No party hereto shall assign this Agreement, or any rights
thereto, without the prior written consent of the other parties hereto.
14.5 Entire Agreement. This Agreement and the other documents
----------------
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties hereto with regard to the subjects hereof and
thereof.
14.6 Notice. All notices and other communications required or
------
permitted hereunder shall be in writing and shall be effective when delivered or
received personally, by facsimile or by registered or certified mail (postage
pre-paid, return receipt requested) (1) if to Alliant or Whiting, at the address
or telecopy set forth below, or at such other address or telecopy as Alliant or
Whiting shall have furnished to Golden in writing, (2) if to Golden or
Shareholder at the address or telecopy set forth below or at such other address
or telecopy as Golden or Shareholder shall have furnished to Alliant and Whiting
in writing.
(a) Alliant or Whiting:
Whiting Petroleum Corporation
1700 Broadway, Suite 2300
Denver, Colorado 80290
Attn: John R. Hazlett
Vice President
Telephone: (303) 837-1661
Facsimile: (303) 861-4023
(b) Golden or Shareholder:
Alan R. Staab
2128 E. 26th Street
Tulsa, Oklahoma 74114
Telephone: (918) 747-0556
Facsimile: (918) 747-2507
14.7 Severability. In case any provision of this Agreement not
------------
material to the benefits intended to be conferred hereby shall be determined to
be invalid, illegal, or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
14.8 Other Documents. The parties to this Agreement shall in good
---------------
faith execute such other and further instruments, assignments or documents as
may be necessary or advisable to carry out the transactions contemplated by this
Agreement.
14.9 Confidentiality. In the event of the termination and
---------------
abandonment of this Agreement, all non-public information shall be held in
strict confidence by Alliant and Whiting and their respective officers,
employees and legal representatives, and the provisions of the confidentiality
letter dated April 29, 1998, between Golden and Whiting shall continue to apply
and survive the termination of this Agreement. Before the Closing, none of the
parties hereto shall make any public release of information regarding the
matters contemplated herein, except (i) a joint press release in agreed form may
be issued by Whiting, (ii) the parties hereto may each continue such
communications with employees, customers, suppliers, franchisees, lenders,
lessors, shareholders, and other particular groups as may be legally required or
necessary or appropriate and not inconsistent with the best interests of the
other party or the prompt consummation of the transactions contemplated by this
Agreement, and (iii) as required by law.
14.10 Titles and Subtitles. The titles of the Articles, Sections
--------------------
and subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement. Referenced herein to exhibits
and schedules to this Agreement shall be deemed to incorporate such exhibits by
reference.
14.11 Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be an original and all of which together
shall constitute one instrument, and which shall become effective when there
exist copies signed by all of the parties hereto.
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their duly authorized representatives, effective as of the date set
forth on the first page hereof.
INTERSTATE ENERGY CORPORATION,
doing business as ALLIANT CORPORATION
ATTEST:
By: /s/ Erroll B. Davis, Jr.
- -------------------------------- ----------------------------------
, Secretary Erroll B. Davis, Jr., President
- ---------------------
and Chief Executive Officer
WHITING PETROLEUM CORPORATION
ATTEST:
By: /s/ John R. Hazlett
- -------------------------------- ------------------------------------
, Secretary John R. Hazlett, Vice President
- ---------------------
GOLDEN GAS PRODUCTION COMPANY
ATTEST:
By: /s/ Alan R. Staab
- -------------------------------- ------------------------------------
, Secretary Alan R. Staab, President
- ---------------------
WITNESS: SHAREHOLDER:
/s/ Alan R. Staab
- -------------------------------- ---------------------------------------
Alan R. Staab
<PAGE>
EXHIBITS
--------
EXHIBIT A Oil and Gas Properties, undeveloped acreage and
---------
materials inventories
EXHIBIT B Stock Redemption Agreement
---------
EXHIBIT C Shareholder Disclosure Schedule
---------
EXHIBIT D Escrow Agreement
---------
EXHIBIT E Audited Financial Statements
---------
EXHIBIT F Alliant Disclosure Schedule
---------
EXHIBIT G Employee Severance Payment Schedule
---------
EXHIBIT H Shareholder Guarantees
---------
<PAGE>
EXHIBIT A
To be filed by amendment.
<PAGE>
EXHIBIT B
STOCK REDEMPTION AGREEMENT
--------------------------
THIS STOCK REDEMPTION AGREEMENT ("Agreement") is made and entered
into as of this day of , 1998 by and between Alan
----- -----------------------
R. Staab ("Seller") and Golden Gas Production Company, an Oklahoma corporation
("Buyer").
RECITALS:
A. Buyer and Seller are parties to that certain Agreement and Plan of
Reorganization dated the 15th day of September, 1998, by and among Interstate
Energy Corporation, doing business as Alliant Corporation, a Delaware
corporation; Whiting Petroleum Corporation, a Delaware corporation; Buyer and
Seller (the "Reorganization Agreement").
B. Pursuant to the Reorganization Agreement, and in order to effectuate
the transactions contemplated therein, Buyer is required to redeem and Seller is
required to offer for redemption ( ) shares of
---------------------------- ---
common stock of Buyer owned by Seller (the "Redeemed Shares") in exchange for
the assignment to Seller of certain assets of Buyer unrelated to the oil and gas
business.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the parties hereto do
hereby agree as follows:
1. Redemption. In consideration of the Kensington Interest (defined
----------
herein), Seller hereby transfers, sells, and assigns all of Seller's right,
title and interest in and to the Redeemed Shares to Buyer. For purposes hereof,
the term "Kensington Interest" shall mean 100% of Buyer's partnership interest
in Kensington Tower Partners, Limited Partnership. The Kensington Interest will
be conveyed to Seller by execution and delivery of an instrument substantially
in the form of assignment attached hereto as "Exhibit A" (the "Kensington
Assignment").
2. Assumption of liabilities. As additional consideration for the
-------------------------
Kensington Interest, Seller hereby agrees to assume and to indemnify and hold
Buyer harmless from and against all obligations and liabilities of Buyer (i) as
guarantor for the debt of Kensington Tower Partners, Limited Partnership, or
(ii) otherwise related to the Kensington Interest and agrees to use his best
efforts to cause Buyer to be removed as guarantor for the debt of Kensington
Tower Partners, Limited Partnership.
3. Representations and Warranties of Seller. Seller hereby represents
----------------------------------------
and warrants to Buyer as follows:
(a) The Seller has full power and authority to execute and deliver this
Agreement and to sell the Redeemed Shares to the Buyer. No consent or
approval from any third person or entity is necessary in order to permit
Seller to sell the Redeemed Shares to the Buyer or, if such consent is
required, the same has been duly obtained.
(b) This Agreement has been duly and properly executed and delivered by
the Seller and constitutes the legal and binding obligation of the
Seller and is fully enforceable against the Seller in accordance with
its terms.
(c) There is no provision under any agreement and no provision under
any law or order to any court binding on the Seller or affecting the
Redeemed Shares which would conflict with or prevent the execution,
delivery or performance of the terms of this Agreement, or which would
be in default or violated as a result of such execution, delivery or
performance.
(d) Seller is the sole record and beneficial owner of the Redeemed
Shares; the Seller has good and merchantable title to the Redeemed
Shares; free and clear of any and all liens, pledges, security
interests, encumbrances, or other restrictions thereon.
(e) Seller and Seller's attorneys and accountants have had the
opportunity to ask any questions and receive answers thereto concerning
the Seller's investment in the Buyer, and to obtain any and all
information concerning the Buyer which the Seller and Seller's attorneys
and accountants desired. Seller has had continuous access to all
information concerning the Buyer including, but not limited to, the
Buyer's financial condition and business operations.
4. Representations and Warranties of the Buyer. The Buyer represents
-------------------------------------------
and warrants to Seller as follows:
(a) The Buyer has full power and authority to execute and deliver this
Agreement and the Buyer has the power and authority to purchase the
Redeemed Shares which has been duly authorized by all proper and
necessary corporate action. No consent by any third person or entity is
required in order for this Agreement to be effective against the Buyer
or, if such consent is required, the same has been duly obtained.
(b) This Agreement has been duly and properly executed and delivered by
the Buyer; it constitutes the valid and legally binding obligation of
the Buyer and is fully enforceable against the Buyer in accordance with
its terms.
(c) There is no provision of any existing agreement and no provision of
any law or order of court binding on the Buyer which would conflict with
or in any way prevent the execution, delivery or performance of the
terms of this Agreement, or which would be in default or violated as a
result of such execution, delivery or performance.
(d) Buyer acknowledges that the Redeemed Shares have not been
registered under applicable securities laws and that the stock
certificate representing the Redeemed Shares bears a restrictive legend
regarding the non-registration position of the Redeemed Shares.
5. Miscellaneous. All representations, warranties and agreements
-------------
contained herein shall survive the execution and delivery of this Agreement.
This Agreement contains the entire agreement between the parties hereto with
respect to the subject matter herein, and no modification shall be effective
unless reduced to writing and executed by each party hereto. In the event legal
proceedings are instituted to enforce or interpret this Agreement, the
prevailing party shall be entitled to his attorney fees from the nonprevailing
party. This Agreement shall be governed and interpreted under the laws of the
State of Oklahoma and shall be binding upon the parties hereto an inure to the
benefit of their respective heirs, personal representatives, successors and
assigns.
"SELLER"
-------------------------------
Alan R. Staab, "Seller"
"BUYER"
-------------------------------
Golden Gas Production Company
By:
----------------------------
<PAGE>
EXHIBIT C
SHAREHOLDER DISCLOSURE SCHEDULE
GAS IMBALANCES LISTING
<TABLE>
<CAPTION>
GAS
IMBALANCE AS OF .... VALUE PER TOTAL VALUE
UNIT UNIT NAME UNDER MCF
(OVER)
#
<S> <C> <C> <C> <C> <C>
101 BARBY #1-7 (3,101) 5/98 1.00 -3101.00
175 BLANCHE FOX (25,554) 5/98 0.25 -6388.50
290 CLIFT #1-4 (263) 2/98 1.00 -263.00
1660 DEDRICK A # 1-9 (2,434) 5/98 1.00 -2434.00
360 DELK #1-6 (1,069) 2/98 1.00 -1069.00
415 ETHYL FRY #1 (FRY GU) (37) 2/98 1.00 -37.00
440 FARRIS C #2-18 (1,823) 2/98 1.00 -1823.00
443 FEDDERSON (2,014) 12/97 1.00 -2014.00
450 FICKLE #1 (18,232) 5/98 1.00 -18232.00
487 GAUT (1,747) 5/98 1.00 -1747.00
615 HERIFORD #2-17 (1,743) 5/98 1.00 -1743.00
655 J.L. ALLEN (8,603) 5/98 0.25 -2150.75
660 J.C. VOORHEES (10,516) 5/98 0.25 -2629.00
710 KEPNER #1 (2,365) 2/98 1.00 -2365.00
730 KEPNER #4 (7,476) 2/98 1.00 -7476.00
740 KING C (16,043) 5/98 1.00 -16043.00
760 KLIEWER #1-25 (6,341) 5/98 1.00 -6341.00
890 MCCLAIN (14,234) 5/98 1.00 -14234.00
900 MCCLURE (2,404) 4/98 1.00 -2404.00
920 MEHL #2 (5,802) 3/98 1.00 -5802.00
930 MILDRED #1-8 (2,729) 3/98 1.00 -2729.00
940 MILDRED #2-8 (895) 3/98 1.00 -895.00
945 MILDRED #3-8 (310) 4/98 1.00 -310.00
950 MILES # 1-8 (14,630) 5/98 1.00 -14630.00
980 MILLIKIN #1 (8,263) 5/98 1.00 -8263.00
1040 NAYLOR #1-21 (965) 1/98 1.00 -965.00
1090 OLMSTEAD (22) 5/98 1.00 -22.00
1190 ROETKER MILLER (50) 5/98 1.00 -50.00
1220 REGNIER #1 (207) 4/98 1.00 -207.00
1230 REGNIER #2 (5,853) 9/97 1.00 -5853.00
1240 REHL #2 (5,250) 4/98 1.00 -5250.00
1320 SCHOONMAKER (1,423) 4/98 1.00 -1423.00
1325 SCHUSTER #1-23 (809) 4/93 1.00 -809.00
1335 SENN (5,468) 3/98 1.00 -5468.00
1358 SHANTZ #1-19 (2,466) 7/97 1.00 -2466.00
1400 STATE #1-16 (508) 2/98 1.00 -508.00
1430 STEWART #1-8 (3,146) 4/98 1.00 -3146.00
1470 THOMAS HILL (40) 5/98 1.00 -40.00
1480 THEODORE LUTZ (25,565) 5/98 0.25 -6391.25
1530 WENGER #1 (2,558) 2/98 1.00 -2558.00
SUBTOTAL (212,958) (160,280)
</TABLE>
PAGE 1
<PAGE>
EXHIBIT C
SHAREHOLDERS DISCLOSURE SCHEDULE
GAS IMBALANCES LISTING
<TABLE>
<CAPTION>
GAS VALUE PER TOTAL VALUE
IMBALANCE AS OF .... MCF
UNIT UNIT NAME UNDER
(OVER)
<S> <C> <C> <C> <C> <C>
35 ALLEN # 1-24 9,380 1/98 1.00 9380.00
40 ARNETT #1-17 1,107 2/98 1.00 1107.00
140 BEARD #1-8 3,301 5/98 1.00 3301.00
142 BEARD " B " UNIT 7,651 5/98 1.00 7651.00
200 BOCKELMAN B 1-5 2,978 5/98 1.00 2978.00
285 CLIFT #1-3 3,534 2/98 1.00 3534.00
300 CLIFT #2-4 241 4/98 1.00 241.00
305 CLIFT #3-4 2,079 4/98 1.00 2079.00
322 CORLEY #1-28 3,264 5/98 1.00 3264.00
412 EDWIN FISHER #1 1,205 5/98 1.00 1205.00
471 FLORIS TOWNSITE 1,226 5/98 1.00 1226.00
551 HARTMAN #1-35 11,578 2/95 1.00 11578.00
610 HERIFORD #1-17 2,813 4/98 1.00 2813.00
36 KATHERINE 15 4/98 1.00 15.00
765 KLUSMEYER 1-25 9,358 8/97 1.00 9358.00
795 LESTER 6,874 2/98 1.00 6874.00
820 MACKEY 1,777 5/98 1.00 1777.00
990 MOELLER 2,069 1/97 1.00 2069.00
1065 NEVA #1-32 247 2/98 1.00 247.00
1210 REES #1-13L 54,023 12/97 1.00 54023.00
1310 SCATES #1-1 145 12/97 1.00 145.00
1380 SILVER BULLET 5,720 10/97 1.00 5720.00
1445 SWITZER A #1-19 2,579 7/97 1.00 2579.00
1510 WALKER #1-3 13,041 4/98 1.00 13041.00
1515 WALKER #2-3 2,768 4/98 1.00 2768.00
1520 WALKUP 6,385 12/97 1.00 6385.00
1527 WAYNE #1-25 62 9/97 1.00 62.00
1581 WIER 5,908 5/98 1.00 5908.00
SUBTOTAL 161,328 161,328
PAGE 2
</TABLE>
<PAGE>
EXHIBIT C
SHAREHOLDER DISCLOSURE SCHEDULE
Golden and Shareholder make the following disclosures relevant to referenced
sections of the Agreement and Plan of Reorganization dated September 15, 1998
3.7 Golden has divested properties related to the gas storage field as
follows:
West Alva A Unit
MarcumShea #1-9 section 9-27n-15w
Wiebner # 1-9 section 9-27n-15w
West Alva B Unit
Marion #1-24 section 24-27n-15w
Bloyd #1-23 section 23-27n-15w
Pipeline rightofway located in sections 8,9,10,15,19,20,and 21of27n-
15w,
and as provided in the Reorganization Agreement, redeemed shares of
common stock owned by Shareholder in exchange for Golden's partnership
interest in Kensington Tower Partners, Limited Partnership.
3.10 The Bellamy #1-23 was under a state restriction limiting production to
150 Mcf/day. Recently, Golden received a letter from the state lifting
this restriction.
3.14.4 The State Williams A#1, East Sturgis Unit did not pass mechanical
integrity test. A new string of 4 1/2 casing has been cemented in the
hole. Currently awaiting equipment to drill out packer and put well
back in service. Anticipate completion by Sept 15. The casing was
purchased prior to June 30 for approximately $20,000. Cost of
installing the pipe and completion of the repair is expected to total
$20,000.
3.16 Golden is subject to gas contracts at Ashland, Scipio, Brooker and
State gathering systems. These contracts are with Golden Gas Service
Company.
At East Kremlin, Golden delivers oil to Energy Exchange Corporation
under an agreement to exchange crude oil for electricity.
3.20 The following AFE's are open and require capital expenditures:
Caprock State Unit To P + A Devon $8,000(before salvage)
Wesner #4-6 To Drill Apache AFE expired
Mildred #2-20 To Drill GGPC AFE expired
Medley # 1-33 To Drill GGPC $20,000--drilled DH
Cunningham #4 To Drill GGPC AFE expired
Cunningham #5 To Drill GGPC AFE expired
Kruger #1-14 To Drill TPX $40,000--Drilled & complete
Hayes #1-36 To Drill TPX $20,000
Stipe #1-22 To Drill TPX $40,000
PAGE 3
<PAGE>
EXHIBIT C
SHAREHOLDERS DISCLOSURE SCHEDULE
3.23 Lease and well equipment on the following list of properties is in some
state of disrepair as noted:
ACS #1-9 Casing leak
Hood#1-31 Casing leak
Barby #1-7 Casing leak
Irene 35-27n-22w Casing leak suspected
Benjegerdes #1-33 Rod part
Caprock State 23-12s-32e Pumping unit failure
Dedrick B#1 Rod part
Harrison #1-19 Pump failure
Hasbrook #2 Rod part
E. M. Haskins 26-19n-6w Pump failure
Martin B Casing leak
Taylor #2 Rod part
Theel(14-7n-12e) Casing leak
Treece #1 Pumping unit failure
Golden and Shareholder make no representations with regard to the
operating status of lease and well equipment at Kremlin Sturgis units.
5.11 Environmental:
East Kremlin Unit Flow line leaks
East Sturgis Unit Flow line leaks
ACS #1-9 Stuffing Box leak
Brown #1 Oil Discharge during workover
PAGE 4
<PAGE>
EXHIBIT D
ESCROW AGREEMENT
----------------
This Escrow Agreement (the "Agreement") dated as of
, 1998, by and among Interstate Energy Corporation, doing
- ---------------------
business as Alliant Corporation, a Delaware corporation ("Alliant"); Whiting
Petroleum Corporation, a Delaware corporation ("Whiting"); Alan R. Staab,
("Seller"), and Norwest Bank Colorado, N.A., a Colorado banking corporation, as
Escrow Agent (the "Escrow Agent"). Whiting, Alliant, Seller and Escrow Agent are
hereinafter collectively referred to as the "Parties."
ARTICLE I
RECITALS
--------
1.1 The Reorganization Agreement. Whiting, Alliant and Seller have
----------------------------
entered into an Agreement and Plan of Reorganization (the "Reorganization
Agreement"), dated as of September 15, 1998, a copy of which is attached hereto
as Exhibit A, with Golden Gas Production Company, an Oklahoma corporation
("Golden"). Seller is the record and beneficial owner of all of the issued and
outstanding shares of Golden and, pursuant to the Reorganization Agreement,
Seller shall exchange such shares for Alliant Common Stock, including the
Alliant Common Stock subject to this Agreement.
1.2. Purpose. Alliant, Whiting and Seller intend this Agreement to be
-------
the Escrow Agreement described in Section 2.6 of the Reorganization Agreement
with respect to the Claims Escrow, as that term is described in the
Reorganization Agreement.
1.3 Capitalized Terms. All capitalized terms used herein and not
-----------------
otherwise defined shall have the meaning ascribed to them in the Reorganization
Agreement.
ARTICLE II
ESCROW PROVISIONS
-----------------
2.1 Appointment of Escrow Agent. Alliant, Whiting and Seller hereby
---------------------------
appoint Escrow Agent to act as escrow agent under this Agreement, and Escrow
Agent hereby accepts appointment as such, upon the terms and provisions set
forth herein.
2.2 Delivery of Shares.
------------------
(a) Pursuant to Section 2.6 of the Reorganization Agreement,
Alliant shall deliver the Alliant Common Stock constituting the shares
to be deposited in the Claims Escrow (the "Escrow Shares") to Escrow
Agent at the Closing. The maximum number of shares deposited by Alliant
in the Claims Escrow shall be 61,719 shares of Alliant common stock.
Simultaneously with the delivery by Alliant to Escrow Agent of the
Escrow Shares, Seller shall deliver to Escrow Agent an executed blank
stock transfer power in respect of such Escrow Shares. Escrow Agent
shall hold the Escrow Shares in the Claims Escrow until disbursements
therefrom are directed in accordance with Section 2.3 below.
(b) Any and all dividends or other distributions paid or
payable by Alliant on the Claims Escrow Shares after the Closing Date
(the "Dividends") shall be paid and distributed by Alliant currently to
Seller.
(c) For the purposes of federal, state and local taxes, and
any other assessments which may be imposed upon the Dividends, the
Dividends shall be treated as taxable income to Seller, who shall be
solely responsible for any federal, state, or local taxes or other
assessments thereon.
(d) During the Escrow Term (as defined in Section 3.1 hereof),
Seller shall have the sole power and authority to vote the Escrow
Shares and the Escrow Agent shall provide Seller with any proxy
material or other instruments or documents it receives with respect to
such right.
2.3 Disbursement of Escrow Shares.
-----------------------------
(a) Whiting may, at any time prior to the Escrow Termination,
propose to apply all or any part of the Escrow Shares to the payment,
reimbursement, settlement or discharge of any liability obligation of
Seller under the Reorganization Agreement (a "Seller Obligation") by
delivering to each of Escrow Agent and the Seller a written notice (the
"Disbursement Notice"), executed by Whiting, specifying such Seller
Obligation and the amount of the Escrow Shares to be applied in respect
thereof which, unless otherwise specified in the Reorganization
Agreement, shall be based on the mean average of the closing prices for
Alliant common stock for the five (5) trading days immediately
preceding the date of such notice determined in accordance with Section
2.2.3 of the Reorganization Agreement. Whiting shall provide promptly
to Seller such documentation supporting the facts specified in the
Disbursement Notice as may be reasonably requested by Seller.
(b) Escrow Agent shall release to Whiting on the date which is
twenty-one (21) days following the date of receipt of the Disbursement
Notice the number of Escrow Shares specified in the Disbursement Notice
unless prior to such release of such Escrow Shares, the Seller shall
deliver to Escrow Agent a written notice (the "Dispute Notice")
specifying the number of such Escrow Shares, if any, Seller believes
should properly be applied to the Seller Obligation (the "Undisputed
Loss") and the number of such Escrow Shares, if any, Seller believes
should not be applied to the Seller Obligation (the "Disputed Amount").
Seller shall, upon delivering the Dispute Notice to Escrow Agent,
promptly deliver a copy thereof to Whiting. Escrow Agent shall, upon
receipt of the Dispute Notice, release to Whiting in accordance with
the first sentence of this Section 2.3(a) the number of Escrow Shares
equal to the amount of the Undisputed Loss, if any, and shall continue
to hold the Disputed Amount, if any, in escrow. Such Disputed Amount
shall be held by Escrow Agent until receipt from Whiting and Seller of
a joint notice and instructions with respect to such Disputed Amount (a
"Resolved Claims Notice") stating that as to such Disputed Amount,
there has been a final determination by agreement between Whiting and
Seller or by a court of competent jurisdiction as to the amount, if
any, of such Seller Obligation (the "Resolved Claims"). Such Resolved
Claims Notice shall be accompanied by an executed copy of such written
agreement between Whiting and Seller or a copy of such judgment. Upon
receipt of such a Resolved Claims Notice, Escrow Agent shall release to
Whiting in accordance with the first sentence of this Section 2.3(a),
Escrow Shares in the aggregate amount of the Resolved Claims. Whiting
and Seller agree to use their reasonable best efforts to resolve any
dispute regarding any Seller Obligation within thirty (30) days after
Whiting's receipt of a Dispute Notice.
(c) Eighteen (18) months from the Closing Date (the
"Disbursement Date") Seller shall receive the balance of the Escrow
Shares then held by Escrow Agent minus the aggregate amount of
Unresolved Claims (as hereinafter defined). If an Unresolved Claim
exists at the Disbursement Date and thereafter is resolved for a lesser
amount (or it is determined that Whiting is not entitled to such
Unresolved Claim), then any additional amount which Seller would have
received at the Disbursement Date had such claim been a Resolved Claim
for such lesser amount (or if it is determined that Whiting was not
entitled to said claim) shall be released to Seller at the time of
determination. For purposes of this Agreement, "Unresolved Claims"
shall mean the aggregate amount of all claims made by Whiting against
the Escrow Shares pursuant to Article V or Article XIII of the
Reorganization Agreement which are not Undisputed Losses or Resolved
Claims, including, without limitation, Disputed Amounts.
2.4 Escrow Agent's Responsibility.
-----------------------------
(a) It is understood and agreed that the duties of the Escrow
Agent are purely ministerial in nature. The Escrow Agent's sole
responsibility shall be for the safekeeping of the Claims Escrow, and
the disbursement thereof in accordance with Section 2.3 above. The
Escrow Agent shall not be required to take any other action with
reference to any matters which might arise in connection with the
Claims Escrow or this Agreement.
(b) The Escrow Agent shall not be responsible for the
performance of Whiting or Seller under this Agreement or any other
agreement. The Escrow Agent may conclusively rely and shall be
protected in acting or refraining from acting upon any document,
instrument, certificate, instruction or signature believed by it to be
genuine and may assume and shall be protected in assuming that any
person purporting to give any notice or instruction in accordance with
this Agreement or in connection with any transaction to which this
Agreement relates has been duly authorized to do so. The Escrow Agent
shall not be obligated to make any inquiry as to the authority,
capacity, existence or identity of any person purporting to have
executed any such document or instrument or have made any such
signature or purporting to give any such notice or instructions. The
Escrow Agent shall not be liable to any person for anything which the
Escrow Agent may do or refrain from doing in connection herewith unless
the Escrow Agent is guilty of gross negligence or willful misconduct.
The Escrow Agent has no duty to determine or inquire into any happening
or occurrence or any performance or failure of performance of Whiting
or Seller with respect to agreements or arrangements with each other or
with any other party or parties.
(c) The Escrow Agent shall not be liable for any action taken
by it in good faith and believed by it to be authorized or within the
rights or powers conferred upon it by this Agreement, and may consult
with counsel of its own choice and have full and complete authorization
and protection for any action taken or suffered by it hereunder in good
faith and in accordance with the opinion of such counsel.
2.5 Possible Disagreements. If any disagreement should arise among any
----------------------
of the Parties hereto with respect to the Claims Escrow or this Agreement, or if
the Escrow Agent in good faith is in doubt as to what action should be taken
hereunder, the Escrow Agent shall have the right at its election to do any or
all of the following: (i) withhold or stop all further performance under this
Agreement and all instructions received in connection herewith until the Escrow
Agent is satisfied that such disagreement has been resolved, or (ii) in final
satisfaction of its duties hereunder, deposit the Claims Escrow with the Clerk
of the United States District Court for the District of Colorado or with the
office of the clerk of the registry of any other court of competent
jurisdiction, or (iii) file a suit in interpleader and obtain an order from a
court of appropriate jurisdiction requiring all persons involved to litigate in
such court their respective claims arising out of or in connection with the
Claims Escrow. Should a bill of interpleader be instituted, or should the Escrow
Agent become involved in litigation in any manner whatsoever on account of this
Agreement, Whiting and Seller hereby jointly and severally bind and obligate
themselves to pay and indemnify and hold harmless the Escrow Agent against, in
addition to any charge made hereunder for acting as Escrow Agent, reasonable
attorneys' fees incurred by the Escrow Agent, and any other disbursements,
expenses, losses, costs and damages in connection with and resulting from such
litigation.
2.6 Indemnity to Escrow Agent. Whiting and Seller jointly and severally
-------------------------
agree to indemnify and hold harmless the Escrow Agent, its directors, officers,
agents and employees and any person who "controls" the Escrow Agent within the
meaning of Section 15 of the Securities Act of 1933, as amended (collectively,
the "Indemnified Parties"), against and from any and all loss, liability, costs
of investigation and reasonable counsel fees and expenses, which any of the
Indemnified Parties may suffer or incur by reason of any action, claim or
proceeding or against any of the Indemnified Parties, arising out of or relating
in any way to this Agreement or any transaction to which this Agreement relates,
other than any action, claim or proceeding resulting from the gross negligence
or willful misconduct of such Indemnified Party. The provisions of this
paragraph shall survive the termination of this Agreement.
2.7 Escrow Fees and Expenses. Whiting and Seller shall pay in equal
------------------------
portions Escrow Agent's escrow fee and customary separate charges in connection
with the Escrow Agent's acting as escrow agent hereunder, and Whiting and Seller
shall reimburse in equal portions the Escrow Agent for its reasonable and
customary legal fees and disbursements incurred in connection with its
performance under this Agreement.
ARTICLE III
MISCELLANEOUS PROVISIONS
------------------------
3.1 Effective Date and Termination. This Agreement shall be effective
------------------------------
as of the date first above written. All of the provisions of this Agreement
shall be fully performed and this Agreement shall terminate by the disbursement
of all of the Claims Escrow as herein set out. In no event shall the Term of
this Agreement extend beyond the fifth anniversary of the date hereof and the
Claims Escrow shall end and the Escrow Shares shall be distributed prior to such
date.
3.2 Entire Agreement; Amendment; Assignment.
---------------------------------------
(a) This Agreement (including the documents referred to
herein) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the Parties
with respect to the subject matter hereof.
(b) This Agreement may be altered, amended or terminated only
with the written consent of each of the Parties.
(c) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any or the Parties hereto
(whether by operation of law or otherwise).
3.3 Resignations. The Escrow Agent may resign as Escrow Agent by giving
------------
each of the other Parties not less than thirty (30) days written notice of the
effective date of its resignation. In the event of the resignation of the Escrow
Agent herein named, Whiting and Seller shall jointly select a substitute Escrow
Agent. The Escrow Agent named herein, upon receipt of appropriate instructions
from the other parties or, failing such instructions, upon its resignation, may
contact the entity next to be named as Escrow Agent as provided herein above and
shall make appropriate arrangements for the transfer of the Claims Escrow and
all of Escrow Agent's records pertaining thereto to such substitute Escrow
Agent. Upon the resignation of the entity last named to serve as Escrow Agent,
or should such entity or entities refuse to serve, if the Escrow Agent, on or
prior to the effective date of its resignation, has not received joint written
instructions from Whiting and Seller regarding the transfer of the Claims
Escrow, it shall thereupon deposit the Claims Escrow into the registry of a
court of competent jurisdiction, at which time the Escrow Agent's duties
hereunder shall terminate. Whiting and Seller intend that a substitute Escrow
Agent shall be appointed to fulfill the duties of the Escrow Agent hereunder for
the remaining term of this Agreement in the event of the Escrow Agent's
resignation, and if Whiting and Seller cannot agree on such substitute Escrow
Agent, they shall use their best efforts to derive a procedure to appoint a
substitute Escrow Agent. The term "Escrow Agent" as used herein shall be
construed to mean the party that was then serving in such capacity hereunder.
3.4 Notices. Any notice or communication required or permitted
-------
hereunder shall be in writing and either delivered personally or telecopied
(with confirmation of receipt) or sent by certified or registered mail, postage
prepaid, and shall be deemed to be given, dated and received when so delivered
personally or telecopied (with confirmation of receipt) or, if mailed, five
business days after the date of mailing to the following address or telecopy
numbers, or to such other address or addresses as such person may subsequently
designate by notice given hereunder.
(a) Alliant/Whiting:
---------------
WHITING PETROLEUM CORPORATION
1700 Broadway, Suite 2300
Denver, Colorado 80290
Attn: John R. Hazlett
Vice President
Telephone: 303.837.1661
Facsimile: 303.861.4023
(b) Seller:
------
ALAN R. STAAB
2128 E. 26th Street
Tulsa, Oklahoma 74114
Telephone: 918-747-0556
Facsimile: 918-747-2507
(c) Escrow Agent:
------------
NORWEST BANK COLORADO, N.A.
1740 Broadway
Denver, Colorado 80274
Attention:
Telecopy:
Telephone:
Any applicable federal, state or local income tax information shall
also be delivered to the Parties hereto at the addresses specified in this
Section 3.4.
3.5 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the internal substantive laws of the State of Colorado without
regard to any applicable conflicts of law principles. This Agreement shall be
subject to such operating circulars of any Federal Reserve Bank, federal laws
and regulations, funds transfer system rules and general commercial bank
practices applicable to funds transfer and related activities.
3.6 Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when such counterparts have been signed by each of the
Parties and delivered to the other Parties, it being understood that all Parties
need not sign the same counterpart.
3.7 Severability. The invalidity or unenforceability of any provision
------------
of this Agreement shall not affect the validity or enforceability of the other
provisions of this Agreement which shall remain in full force and effect. In the
event any court or other competent authority holds any provision of this
Agreement to be null, void or unenforceable, the Parties hereto shall negotiate
in good faith the execution and delivery of an amendment to this Agreement in
order, as nearly possible, to effectuate, to the extent permitted by law, the
intent of the Parties hereto with respect to such provision.
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
NORWEST BANK COLORADO, N.A.
as Escrow Agent
By:
-------------------------------
Name:
Title:
WHITING PETROLEUM CORPORATION
By:
-------------------------------
Name: John R. Hazlett
Title: Vice President
SELLER
----------------------------------
Alan R. Staab
<PAGE>
EXHIBIT E
To be filed by amendment.
<PAGE>
EXHIBIT F
ALLIANT DISCLOSURE SCHEDULE
There are no disclosures by Alliant relevant to the Sections in Article
IV of the Agreement and Plan of Reorganization dated September 15, 1998.
<PAGE>
EXHIBIT G
EMPLOYEE SEVERANCE PAYMENTS
Severance payments to be made by Golden on or before the Closing Date will total
$157,500 and require an additional employer payroll tax payment of $7,300. Total
Disbursement $164,800.
<PAGE>
EXHIBIT H
SHAREHOLDER GUARANTEES
The following obligations of Golden Gas Production Company have been guaranteed
by Shareholder Alan R. Staab:
() Bank borrowing under a credit agreement with Bank One, NA.
() Operations and plugging bonds as required by various federal,
state and local municipalities.
EXHIBIT H
FORM OF NOTICE OF PROPOSED TRANSACTIONS
SECURITIES AND EXCHANGE COMMISSION
(Release No. 35- ; 70- )
Filings under the Public Utility Holding Company Act of 1935 ("Act")
Interstate Energy Corporation ("Interstate")
Alliant Industries, Inc. ("Industries")
Whiting Petroleum Corporation ("Whiting")
Notice of Proposal to Acquire Securities
of Non-Utility Company and to Issue Common Stock
October , 1998
--
Notice is hereby given that the following filing(s) has/have been made
with the Commission pursuant to provisions of the Act and rules promulgated
thereunder. All interested persons are referred to the application(s) and/or
declaration(s) for complete statements of the proposed transaction(s) summarized
below. The application(s) and/or declaration(s) and any amendments thereto
is/are available for public inspection through the Commission's Office of
Public Reference.
Interested persons wishing to comment or request a hearing on the
application(s) and/or declaration(s) should submit their views in writing by
, 1998 to the Secretary, Securities and Exchange Commission,
- ---------------
Washington, D.C. 20549, and serve a copy on the relevant applicant(s) and/or
declarant(s) at the address(es) as specified below. Proof of service (by
affidavit or, in case of an attorney at law, by certificate) should be filed
with the request. Any request for hearing shall identify specifically the
issues of fact or law that are disputed. A person who so requests will be
notified of any hearing, if ordered, and will receive a copy of any notice or
order issued in the matter. After said date, the application(s) and/or
declaration(s), as filed or as amended, may be granted and/or permitted to
become effective.
* * * * * *
<PAGE>
Interstate, a registered holding company under the Act whose principal
business address is at 222 West Washington Avenue, Madison, Wisconsin
53703-0192,1 Industries, a wholly-owned non-utility subsidiary of Interstate,
and Whiting, a wholly-owned non-utility subsidiary of Industries (collectively,
the "Applicants"), are requesting authority for various transactions, as
described below, relating to the acquisition by Interstate of all of the issued
and outstanding common stock of Golden Gas Production Company ("Golden Gas"),
an Oklahoma corporation. Golden Gas is an independent oil and gas producer
located in Tulsa, Oklahoma. Its assets consist primarily of interests in 240 gas
and oil wells, most of which are in Oklahoma. Golden Gas operates 120 of these
wells. Gas production accounts for 87% of the revenues of Golden Gas. For the
year ended December 31, 1997, Golden Gas had revenues of $4.4 million and net
income of $662,000. Golden Gas does not own or operate any facilities used for
the distribution at retail of natural or manufactured gas.
Whiting is also engaged in the business of purchasing, developing, and
producing crude oil and natural gas. Since its organization in 1980, Whiting has
grown primarily through the purchase and additional development of oil and gas
producing properties. Over the past three years, acquisitions of producing
properties by Whiting have totaled nearly $100 million. Whiting currently has an
interest in 333 wells in Oklahoma and is operator of 29 wells. For the year
ended December 31, 1997, Whiting had revenues of $69 million and net income of
$12.8 million.
Interstate, Whiting, Golden Gas and Alan R. Staab, sole shareholder of
Golden Gas ("Shareholder"), have entered into an Agreement and Plan of
Reorganization, dated September 15, 1998 (the "Agreement"), pursuant to which
Interstate has agreed to acquire from Shareholder all of the issued and
outstanding common stock of Golden Gas ("Golden Gas Stock") through a tax-free
exchange of Interstate's shares of common stock, $01 par value per share
("Interstate Stock") under Section 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended. Once the transaction is completed, Interstate intends to
contribute the Golden Gas Stock to Industries which, in turn, will contribute
such shares to Whiting, which will thereafter manage the oil and gas assets of
Golden Gas.
Interstate requests authorization to issue the Interstate Stock in
exchange for the Golden Gas Stock. In addition, to the extent that such
transactions are not exempt pursuant to Rule 45(b) under the Act, Interstate and
Industries request authorization to contribute the acquired shares of Golden Gas
Stock to Whiting.
- --------
1 See WPL Holdings, Inc., et al., Holding Co. Act Release No. 26856
(April 14, 1998), 66 SEC Docket 2256. Interstate's public-utility subsidiaries
are Wisconsin Power & Light Company, South Beloit Water, Gas and Electric
Company, Interstate Power Company, and IES Utilities, Inc. (collectively, the
"Operating Companies"). Together, the Operating Companies provide public-utility
service to approximately 895,000 electric and 378,000 retail gas customers in
parts of Wisconsin, Iowa, Minnesota, and Illinois.
<PAGE>
Under the Agreement, the parties have agreed that the value of the
Golden Gas Stock is $9,485,500, subject to certain adjustments that are
specified in the Agreement (the "Agreed Value"). Interstate has agreed to
exchange for the Golden Gas Stock a number of shares of Interstate Stock
determined by dividing the Agreed Value by $32. In addition, if, on the date of
closing, the Market Price of the Interstate Stock (defined as the mean average
of the closing prices for the Interstate Stock for the first ten of the last
fifteen trading days immediately prior to the closing date) is less than $32 per
share, then, on the second anniversary of the date of the Agreement, Shareholder
shall be entitled to receive an additional number of shares of Interstate Stock
representing the difference, if any, between $32 per share and the greater of
(i) the average of the trading prices for Interstate Stock for the 90 days
immediately preceding such second anniversary, or (ii) the Market Price;
provided that in no event shall such difference exceed $4 per share. If the
average of the closing prices for the Interstate Stock, as determined pursuant
to (i), above, shall exceed $32, Shareholder shall not be entitled to any
additional shares of Interstate Stock.
Interstate has reserved 246,875 unissued shares of Interstate Stock
to be exchanged at closing for the Golden Gas Stock, representing, on a pro
forma basis, about .32% of the issued and outstanding shares of Interstate Stock
as of July 31, 1998, and an additional 35,268 shares of Interstate Stock,
representing the maximum number of shares of Interstate Stock required to be
delivered to Shareholder on the second anniversary date of the Agreement in
accordance with the computation described above. The shares of Interstate Stock
issued in this transaction will be "restricted securities" within the meaning of
the Federal securities laws and may be resold by Shareholder without
registration under the Securities Act of 1933, as amended, only in accordance
with Securities Act Rule 144.
The Applicants state that the assets and operations of Golden Gas are
quite similar to those of Whiting and will be incorporated into Whiting's
existing business. As indicated, Whiting currently has an interest in 333 gas
and oil wells in Oklahoma, and the acquisition of Golden Gas will provide
Whiting with an interest in an additional 240 wells. The acquisition will
approximately double Whiting's Oklahoma oil and gas reserves.
* * * * * *
For the Commission, by the Division of Investment Management, pursuant
to delegated authority.
Jonathan G. Katz
Secretary
